China to scrap foreign ownership limits in securities, futures and fund management firms next year in apparent trade-war concession
- The securities watchdog said the limits will be abolished for futures firms on January 1, mutual fund managers on April 1, and securities companies on December 1 next year
- Move will give foreign players a chance to better tap the Chinese market, but domestic firms will still dominate for a few years to come, say analysts
China’s securities watchdog officially has unveiled the time frame for abolishing foreign ownership restrictions on futures, securities and fund management companies, the latest sign that Beijing is accelerating efforts to open up its finance sector amid its gruelling trade war with the US.
The China Securities Regulatory Commission (CSRC) said on Friday that limits on foreign investors in mainland-based futures firms would be scrapped on January 1 next year.
Limits on mutual fund companies will be removed on April 1, while the caps on securities firms will be removed on December 1, 2020.
The deregulation paves the way for foreign institutions to set up wholly-owned units on the mainland to deal with futures, mutual fund management and securities businesses when the new rules take effect.
“Scrapping the ownership limits will give foreign players an opportunity to better tap the mainland securities markets,” said Wang Feng, chairman of Shanghai-based financial services firm Ye Lang Capital. “But the market will still be dominated by China’s home-grown companies for a few years.”