ByEditors, Regulation Asia Published on 31st August 2020
The approval makes the BlackRock the first foreign financial institution to receive approval to set up a wholly-owned mutual fund unit in China.
The CSRC (China Securities Regulatory Commission) has granted approval to BlackRock allowing it to set up a wholly-owned mutual fund unit in the country.
BlackRock applied for a mutual fund license in China earlier this year following the removal of foreign ownership restrictions for fund management companies and securities firms on 1 April.
The approval, granted on 21 August but only announced a week later, makes BlackRock the first foreign business to receive such an approval in China. Other firms including Neuberger Berman, Fidelity and Schroders are also seeking to set up wholly owner mutual fund units in the country.
BlackRock’s new company will have registered capital of CNY 300 million (USD 43.7 million) and will be based in Shanghai. Its business scope will include mutual fund management, fund sales and handling of private assets. BlackRock has six months to set up the company.
The approval came days after senior US and Chinese officials committed to carrying out the phase-one trade deal signed in January, which included an agreement to grant US firms greater access to China.
The CBIRC (China Banking and Insurance Regulatory Commission) has also recently granted approval to BlackRock to form a wealth management joint venture with Temasek Holdings and China Construction Bank.
BlackRock manages some USD 7.3 trillion and has had a presence in China for more than ten years, including a wholly-owned private funds unit set up in 2017.