(Bloomberg) -- UBS Group AG submitted an application to acquire a majority stake in its Chinese securities venture, becoming the first global bank to take advantage of Beijing’s latest commitment to open its financial markets to foreign firms.
The China Securities Regulatory Commission received the application from the Zurich-based bank on Tuesday, according to a statement on the CSRC website. UBS said in a separate statement it aims to raise the stake in its China venture to 51 percent, up from the current 24.99 percent.
China renewed a pledge last month to open its financial markets and set a June deadline for allowing foreign firms to own as much as 51 percent of their securities JVs, up from the current 49 percent ceiling. On April 28, the CSRC followed up by issuing detailed guidelines, setting out the qualifications required from foreign shareholders and the scope of the businesses they can establish.
The moves present great opportunities for UBS’s investment banking, wealth and asset management operations in China, the Swiss bank’s said in its statement.
Global investment banks have spent years operating with limitations in China as they waited for an opportunity to become majority owners, a shift that could motivate them to step up expansion there. With the impasse finally at an end, at least three foreign firms are planning to increase their stakes. Securities firms in China raked in a combined $50 billion of revenue last year, official data show.
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UBS Chief Executive Officer Sergio Ermotti said in January the firm is in discussions with its local partners on taking a 51 percent stake in the venture. Morgan Stanley and Goldman Sachs Group Inc. have also signaled a desire to take majority stakes in their Chinese ventures.
Separately, the China Banking and Insurance Regulatory Commission approved plans by ICBC-AXA Life Insurance to set up an asset management unit, making it the first such venture to be approved after President Xi Jinping vowed to accelerate opening of the nation’s insurance industry last month.
©2018 Bloomberg L.P.
With assistance from Jun Luo