(Yicai Global) July 22 - China has recently released 11 measures to further open up its financial sector.
One of these will advance the date for scrapping the overseas shareholding ratio limit in securities, fund management and futures firms, moving it to next year from 2021 as originally planned.
China's Central Bank will allow foreign-funded institutions to ply the credit rating business domestically and let them rate various bonds in the interbank and exchange bond markets, it said in a statement on July 20. Overseas financial institutions are urged to take part in the setup and investment of wealth management units of commercial banks.
Overseas asset management institutions are allowed to set up wealth management companies controlled by foreign parties in joint ventures with Chinese banks or subsidiaries of insurance companies. The country will also grant access for foreign financial institutions to invest in pension management companies. It also supports foreign wholly-owned or shareholding money brokerage firms.
China advanced the time of lifting the overseas shareholding ratio limit in personal insurance foreign investment to 100 percent from 51 percent from 2021 to 2020. It has canceled the provision that a domestic insurance company shall hold at least 75 percent of the total shares of an insurance asset management company and now allows foreign investors to hold more than 25 percent of these shares.
Chinese regulators will lower the threshold for foreign-funded insurance companies and cancel the 30-year operating period requirement. Foreign institutions may obtain Class A lead underwriting license in the interbank bond market thus further easing foreign institutional investment in these debt securities.
The country continues to promote high-level opening-up of the capital market. It raised the limit on the proportion of foreign investment in joint ventures for securities, fund management and futures companies to 51 percent, and phases even this limit out after three years, it said in a statement in the last year.
Editor: Ben Armour