JPMorgan, Standard Chartered Approved for Fully-owned Chinese Ventures

JPMorgan Chase gained full control of its Chinese mutual fund in January, buying out local partners Shanghai International Trust with rival Manulife Financial. A final price was not disclosed.

The China Securities Regulatory Commission (CSRC) approved the bank’s 49% stake in China International Fund Management (CIFM), the watchdog said in a statement. It also gave the go-ahead for London-based bank Standard Chartered to establish a wholly-owned securities brokerage offering underwriting and asset management services.

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China sped up approvals for global firms toward the end of 2022, and following the country’s easing of strict COVID-19 protocols, competition among wholly-owned foreign firms is escalating.

“This is just the latest in a series of approvals for foreign groups to build and expand in China,” Peter Alexander, Managing Director at Shanghai-based consultancy Z-Ben Advisors, told the South China Morning Post. “[R]eopening trade is about much more than just investing into stocks.”

With skepticism about China’s ability to sustain such approvals running high among some global firms, the JPMorgan news may bolster confidence.

The bank is committed to bringing its “full force” to China, according to Chief Executive Officer Jamie Dimon.

CIFM was set up in 2004 to tap the country’s growing affluence.

CIFM oversaw nearly 200 billion yuan in assets at the end of June 2022, serving about 61 million retail and institutional clients, its website stated. JPMorgan needed to pay at least 7 billion yuan for the 49% stake, a 51% premium over its appraised value, according to a 2020 statement. The bank made its intentions known in 2018 that it was seeking majority control of the business.

Standard Chartered is also considering establishing a stand-alone wealth management unit in China to sell mutual funds to retail investors, Bloomberg reported in 2022.