JPMorgan’s majority-owned Chinese securities business to start operations, as Beijing makes good on liberalisation promise

Beijing has given US bank JPMorgan Chase the go-ahead to start operating its majority-owned joint-venture in mainland China.

Following the approval by top watchdog China Securities Regulatory Commission (CSRC) on Wednesday, the bank can formally offer international and mainland clients a set of services ranging from brokerage and securities underwriting to investment advisory.

JPMorgan is the second international lender to get approval in the space of a month after Japanese financial services company Nomura got the go-ahead in late November. It is the third over all, after Swiss giant UBS received the green light a year ago.

“We will continue to invest in and fully support our business in the country, which has become a critical market for many of our domestic and global clients,” Jamie Dimon, JPMorgan’s chairman and chief executive, said in a statement.

Beijing, under pressure to deregulate its financial sector amid the ongoing US-China trade war, has since last year quickened the opening up of the sector. In April 2018, it pledged to lift investment caps to allow foreign brokerages majority control of their mainland joint ventures, as it responded to demands by the US to open its onshore financial services market.

Before the policy relaxation, holdings by foreign investors were capped at 49 per cent. In December 2018, UBS became the first foreign bank to receive approval for its majority-owned joint venture. Three months later, it was joined by JPMorgan and Nomura, who got the nod from regulators to start the process of setting up their majority-owned securities ventures.