China to remove caps on foreign ownership of securities
According to AFP report, foreign firms would be allowed to own a controlling share of futures companies from January 1, 2020, and mutual funds from April 1, 2020.
The move was announced by Shanghai Securities News, a website affiliated to the China Securities Regulatory Commission (CSRC).
Caps on foreign ownership of securities firms will be removed on Dec 1, 2020, the report said citing Gao Li, a spokeswoman for CSRC.
Removing caps would mean scrapping entry barriers for foreign insurance companies, such as a requirement of 30 years of business operations, and cancelling a 25 % equity cap on foreign ownership of insurance asset management firms.
China has long promised to further open up its economy to foreign business investors, but the practical implementation was being delayed constantly.
With China’s economy slowing down, Beijing has revived its efforts in changing regulations to attractor overseas investments.
Earlier this year, various reports suggested once the caps are removed, foreign investors will also be encouraged to set up wealth management firms, currency brokerages and pension management companies.
On top of that, foreign-owned credit-rating agencies will also be allowed to evaluate a greater number of bond and debt types, the statement said.
Last month China removed limits on foreign institutions wanting to invest in its stocks and bond markets, amid cooling domestic growth and a bruising trade war with the United States.
The country's Financial Stability and Development Committee in July also said that foreign investors will be encouraged to set up wealth management firms, currency brokerages and pension management companies next year.
In November 2018, Beijing made an exception from the existing rules for two European insurers, Germany's Allianz and France's Axa.
It has allowed Allianz to launch a 100%foreign-owned subsidiary, while Axa washable to take full control of its joint venture there. Last year, China's securities regulator has also authorised Swiss bank UBS to take a controlling stake in its local business.