An investor watches the electronic board at a stock exchange hall on June 24, 2013, in Huaibei, China. (Photo : Getty Images)
China Securities and Regulatory Commission (CSRC) has announced that the U.S.-China Strategic and Economic Dialogue (SED), which was held in Beijing in June, confirmed that qualified foreign and joint-venture companies in the country can now be registered as private securities firms with the Asset Management Association of China (AMAC), China Daily posted on Friday.
With the announcement, overseas companies registered as private securities firms can avail of licenses to invest in the Chinese stock markets, the report said.
"The new move can attract more excellent asset management institutions from abroad to enter the Chinese market and thus diversify participants in the capital market," said CSRC spokesman Zhang Xiaojun. "It also deepens the opening up of the Chinese capital market."
AMAC said that qualified companies who wish to register as private securities firms should be set up in China and that their foreign shareholders should be approved by financial regulators in their respective countries or regions.
Jackson Lee, a spokesman of the Beijing office of the global asset management company Fidelity International, welcomed the announcement.
Fidelity established an office in Shanghai in October the previous year to complement its initiatives in China.
"We are pleased to hear this piece of good news and would like to increase investment exposure in China," Lee said. "We will follow the policy and have close communications with regulators."
Liu Shiwei, a partner of Shanghai Yuelu Investment, said individual investors make up a huge portion of China's stock market, so it is very important to increase the proportion of investors.
"It also creates a healthy competitive environment in China's capital market," said Liu. "Many foreign private securities firms have good investment ideas and strategies and risk control capabilities, so domestic partners can have closer communication and cooperation with them."
During the SED, the Chinese government made a commitment to gradually increase the shareholding proportion of qualified foreign financial institutions in securities firms and asset management companies.
As of May this year, there are 10,769 private securities firms registered with AMAC with 2.2 trillion yuan ($330.4 billion) under management, according to data from the association.
