China will allow foreign private fund managers to participate in the Shanghai-Hong Kong Stock Connect programme, and in the country’s interbank bond market, as it moves to further open up the domestic fund management industry.
The Asset Management Association of China (AMAC), which unveiled the measures recently, says it will also design professional qualification examinations in English for foreign executives and fund managers.
"These measures are aimed at creating a level playing field for the foreign players, as well as to convey that China is open to further liberalise its fund management industry," the industry group says in a statement on August 9.
AMAC also says it welcomes foreign private fund managers to apply to operate retail mutual fund businesses, but did not specify whether the managers have to work with local partners or whether they will be allowed to deal directly with retail investors. Spokespersons for AMAC did not immediately respond to questions from Asia Asset Management.
Foreign fund managers can currently only conduct retail fund business via joint ventures with Chinese partners.
There are currently 21 foreign financial institutions approved to set up wholly-owned subsidiaries in China, but they are only allowed to sell products to high net-worth-individuals and institutional clients
AMAC’s move comes days after JP Morgan’s asset management unit announced its plan to become the majority shareholder in China International Fund Management Co. Ltd by raising its stake in the joint venture to 51% from 49%.
If Chinese regulators approve the deal, JP Morgan will become the first foreign company to hold a majority stake in a Chinese mutual fund company.
AMAC is a self-regulatory body under the supervision of the China Securities Regulatory Commission.