Up to APRIL 2018, foreign entities cannot own a majority or control joint venture securities firms in China.
The industry is considered by the government as one of the ‘protected sectors’.
Over the last 2 years the Chinese government have been studying to open up the capital markets to foreign investors as part of its plan to make China capital markets more international, to become a leading financial center in Asia as a start and then on to the worldwide space. The move is one of the many initiatives by President Xi Jing Ping to open up China’s $40 trillion financial sector and this was RE-affirmed by President Xi in his speech at the Boao Forum for Asia in April this year.
On 28th APRIL the financial regulators announced that foreign entities can now own more than 51% and control joint venture securities firms in China.
Thus will hopefully spur more investments into this sector and also uplift the quality, branding and image of the securities firms.
The move will also encourage rich chinese and entities to keep their funds and wealth in China to be professionally managed by more foreign control international financial institutions in China and will have an impact on capital outflow.