China grants JPMorgan and Nomura approval to take controlling stakes in local securities firms

JPMorgan Chase and Nomura Holdings have received approval from the Chinese securities regulator to set up majority-owned brokerage joint ventures.

The approvals, the first since December, follow an earlier pledge by mainland officials to further open the nation’s domestic securities market to foreign competition.

The two companies can each set up a joint venture with a controlling 51 per cent stake, according to an announcement by the China Securities Regulatory Commission on Friday after the market close.

Last April, Beijing announced it would lift the investment cap to allow foreign brokerages majority control of their mainland joint ventures, responding to demands by the US to open the onshore financial service market. Before the policy relaxation, holdings by foreign investors were capped at a maximum 49 per cent.

“This is an important step in building up our China business,” Nomura chief executive Koji Nagai said in a statement. “With an increased presence in China, we aim to support economic growth in both China and Japan and firmly establish ourselves as a global financial service group with deep roots in Asia.”

JPMorgan will set up its majority-controlled joint venture in Shanghai, working with Shanghai Waigaoqiao Free Trade Zone Group and four other investment firms, according to sources with knowledge of the matter.