ZCZC
BCN-23
BANKING-CHINA-SWITZERLAND
China allows UBS to control local securities business
BEIJING, Dec 1, 2018 (BSS/AFP) – UBS has been authorised by China’s
securities regulator to take a controlling stake in a local business, making
the Swiss giant the first foreign bank allowed to do so under new rules.
Beijing in April relaxed the rules in the financial industry in a move to
open up the economy.
“The China Securities Regulatory Commission (CSRC) recently approved UBS
AG to increase the shareholding ratio of UBS Securities Co. Ltd. to 51
percent,” the regulator said in a statement late Friday.
“This is the first foreign-controlled securities company approved by the
China Securities Regulatory Commission after the implementation of the
Measures for the Administration of Foreign-invested Securities Companies.”
USB AG, which currently owns about 25 per cent of shares in the USB
Securities Co. Ltd joint venture, said in a statement that it would acquire
stakes from China Guodian Capital Holdings and COFCO.
Other financial firms like Wall Street titan JP Morgan Chase and Japan’s
Nomura Holdings are still awaiting approval.
Laws limiting foreign ownership of local financial firms have long stopped
global banks from independently operating in China and limited their growth.
But Beijing said it would liberalise shareholding limits in the financial
services industry last year, soon after US President Donald Trump visited.
Officials moved to make good on the pledge in April, immediately allowing
foreign investors to take 51 percent stakes in securities firms and fund
managers, with pledges set out to eventually allow full control.
Earlier this week, two European insurance giants Allianz and Axa received
approval to expand their footprint in China — Allianz has been allowed to
start a company fully funded by foreign capital while Axa would take full
control of a joint venture.
Beijing has pledged to open up its economy as it looks to head off a
possible trade tensions have increased with the United States, which accuses
it of using unfair practices to get an advantage for its own firms and
destroying American jobs.
Trump has slapped punishing tariffs on more than $250 billion in Chinese
imports so far this year and China responded with its own tariffs on $110
billion in US goods.
But the US president has threatened to target the remaining $267 billion
worth of Chinese imports as well, hitting Apple iPhones and laptops produced
in China.
Trump is set to meet with Chinese leader Xi Jinping in Argentina on
Saturday where they are attending the G20 summit.
BSS/AFP/HR/1425