(Yicai Global) Feb. 6 -- US financial services giant Morgan Stanley has been given regulatory approval to take full control of its fund management unit in China.

The China Securities Regulatory Commission approved Morgan Stanley International Holdings to raise its stake in Morgan Stanley Huaxin Funds to 100 percent from 49 percent, according to a notice posted on the watchdog’s website on Feb. 3.

The approval means Morgan Stanley Huaxin Funds is set to become China’s seventh wholly foreign-owned fund manager after J.P. Morgan Chase was given the green light on Jan. 19 to buy the rest of China International Fund Management.

Morgan Stanley Huaxin Funds managed 35 funds with total net assets of CNY23.8 billion (USD3.5 billion) at the end of last year, according to data from Wind. It ranked 102nd among 195 fund managers in China.

Other foreign investment managers such as VanEck and AllianceBernstein have also applied to the CSRC to fully own their joint venture fund management units in China.

Morgan Stanley became a shareholder of Morgan Stanley Huaxin Funds in June 2008. Since China lifted restrictions on offshore capital in securities companies and mutual funds in April 2020, the New York-based firm gradually increased its shareholding in the unit to 49 percent.

The positioning of Morgan Stanley Huaxin Funds may be clearer after Morgan Stanley gains full control, with possible future developmental innovations, a source in the public offering industry told Yicai Global.

Overseas financial players can bring professional and diversified investment strategies and management models, as well as inject vitality into the domestic public fund industry and create a new development pattern, when entering the Chinese market, the source added.

Editors: Tang Shihua, Futura Costaglione