China allows UBS to control local biz

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 (CSRC) recently approved UBS AG 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.” USB AG, which currently owns about 25 per cent of shares in the USB Securities Co. Ltd joint venture said in a statement that it would acquire stakes from China Guodian Capital Holdings and COFCO. Other financial firms like Wall Street titan JP Morgan 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 it would liberalise shareholding limits in the financial services industry last year. 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.