[Exclusive] China to Allow Certain Foreign Firms to Manage Public Offering of Funds
Zhou Ailin
DATE:  Dec 04 2019
/ SOURCE:  yicai
[Exclusive] China to Allow Certain Foreign Firms to Manage Public Offering of Funds [Exclusive] China to Allow Certain Foreign Firms to Manage Public Offering of Funds

(Yicai Global) Dec. 3 -- China is preparing to allow wholly foreign-owned enterprises with private fund management licenses to handle the public offering of funds, a type of investment vehicle, as it continues to open up its capital markets to global players, according to an industry insider.

The move will give overseas financial institutions the chance to reach more Chinese investors in addition to providing services for high-net-worth clients, the insider said. To qualify, applicants would need to have a registered capital of CNY400 million (USD56.7 million) and their investment network should be localized.

The public offering of funds is an investment product that gathers funds through public offerings and uses securities as its main investment target.

At the moment, there are 21 WFOEs with PFM permits registered with the Asset Management Association of China that could qualify for the new license. The permit allows foreign capital to set up a local office, raise funds and invest in China, rather than via cross-border investments. Those 21 WFOEs offer 46 financial products and have CNY5.4 billion (USD765.4 million) of assets under management, according to AMAC data released in August.

Fidelity International, a London-based investment management firm, has said that it would consider applying. On Nov. 6, Fidelity said it would do so at the appropriate time. The company had no further comment to make when contacted by Yicai Global. Fidelity was one of the first WFOEs in China to obtain a PFM license in 2017.

The Shanghai investment management arm of Pennsylvania-based Vanguard Group also declined to comment.

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Keywords:   WFOE PFM