HONG KONG (Reuters) – China on Thursday approved JPMorgan’s (JPM.N) application to operate the first fully foreign-owned futures business, as the world’s second-largest economy pushes ahead with opening its multi-trillion-dollar financial market.
FILE PHOTO: The JP Morgan sign is pictured at its Beijing office, in this picture taken December 13, 2010. Picture taken December 13, 2010. REUTERS/Jason Lee/File Photo
The latest regulatory approval for a U.S. financial services company coincides with tension between Beijing and Washington, increased by the COVID-19 pandemic and China’s move to impose security legislation on Hong Kong.
JPMorgan reportedly sought full control of its China futures joint venture last December as Beijing moved to scrap caps on foreign ownership. The futures industry in China is dominated by local players.
The China Securities Regulatory Commission (CSRC) said in a statement posted on its website the approval would bring in more qualified foreign players.
JPMorgan had no immediate comment.
China’s central bank on Saturday gave the final nod to a network clearing licence for an American Express (AXP.N) joint venture, allowing it to be the first foreign credit card company to launch onshore operations in China.
The approval for JPMorgan to launch its futures business follows on from other licences the bank has received in the last six months to increase its shareholding in other financial services business in China.
Caps on the foreign ownership of futures companies were scrapped at the start of this year.
China is a “critical market” for clients globally, JPMorgan CEO Jamie Dimon said in December when the bank received approval to establish a majority-owned securities joint venture, offering brokerage, investment advisory and underwriting services.
In April, the biggest bank in the U.S. said it would raise its stake in a Chinese mutual fund venture to 100%.
Reporting by Noah Sin and Sumeet Chatterjee in Hong Kong, Lusha Zhang in Beijing and Andrew Galbraith in Shanghai; Editing by Mark Potter and Barbara Lewis