China securities regulator eased some restrictions on foreign ownership of securities ventures

A Chinese flag is hoisted outside a commercial building in Shenzhen, China's southern Guangdong province July 16, 2009. China looks set to hit its full-year growth target of 8 percent after a surprisingly strong second quarter notable for a surge in investment driven by powerful fiscal and monetary stimulus. REUTERS/Bobby Yip (CHINA BUSINESS POLITICS)

Vastavam web: China’s securities regulator has released new guidelines for foreign investment in Chinese security joint ventures in which it eased some restrictions and launched an application process for more foreign ownership.The consultation period for the new rules that began in March is now over and the final regulations have been officially released for immediate implementation, the regulator said in an announcement on its website late on Saturday.

Foreign bankers had expressed concern over this particular restriction, saying it might have required Western banks to include a third partner in deals which might stymie broadening international participation in China’s domestic securities markets.Foreign firms that wish to make changes to their equity ownership in local securities joint ventures or that wish to establish a new joint venture can now apply to the regulator, it said in a question-and-answer published online.

Previously, Western banks could only own up to 49 percent of their Chinese securities joint ventures. That lack of control and limited contribution to revenue have long been a source of frustration.The regulator also said that applications for owning up to 51 percent of local fund management companies are already being accepted, though added that this was unrelated to the changes in securities guidelines.It was unclear from the statement whether such applications are currently being accepted for all different types of Chinese fund management companies.