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UBS gets green light from China to control local securities business
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 recently approved UBS to increase the shareholding ratio of UBS Securities Co Ltd to 51 per cent," 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."
UBS, which currently owns about 25 per cent of shares in the UBS Securities Co Ltd joint venture, said in a statement that it would acquire stakes from China Guodian Capital Holdings and COFCO.
Other financial firms such as Wall Street titan JPMorgan 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 last year it would liberalise shareholding limits in the financial services industry, soon after US President Donald Trump visited.
Officials moved to make good on the pledge in April, immediately allowing foreign investors to take 51 per cent stakes in securities firms and fund managers, with pledges set out to eventually allow full control.
Last 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 potential slowdown amid trade tensions with Washington, which accuses it of using unfair practices to get an advantage for its own firms and destroying American jobs.
Mr Trump has slapped punishing tariffs on more than US$250 billion in Chinese imports so far this year and China responded with its own tariffs on US$110 billion in US goods.
But the US president and his Chinese counterpart Xi Jinping over the weekend pledged to temporarily halt new tariffs from Jan 1 amid talks to resolve the trade differences. AFP