Fidelity cleared to open own mutual fund business in China
Approval from China’s Leading Securities Regulator International loyalty Friday to start a wholly-owned mutual fund business, making the U.S. company the world’s second-largest asset manager after BlackRock Inc. to tap into the country’s rapidly growing wealth market.
The new company, which will be based in Shanghai with a registered capital of $ 30 million, is 100% controlled by Fil Asia Holding Pte. Ltd., a unit of Fidelity based in Singapore. The new Chinese company can manage mutual funds and private funds, the China Securities Regulatory Commission (CSRC) said in a statement. At the end of 2020, Fidelity managed $ 700 billion in assets worldwide.
Black rock got the green light in August 2020 to launch its mutual fund business in China. Several other foreign asset managers, including Neuberger Berman Group, VanEck and Schroders PLC, are under regulatory review. loyalty submitted his candidacy for the new company in May 2020, a month after BlackRock, which registered its first mutual fund product in late July.
Foreign financial institutions are rushing to exploit China’s multibillion-dollar asset management industry as the country prepares to ease controls on financial industries.
In 2017, Fidelity became the first foreign institution to establish a wholly-owned private fund company in China after obtaining regulatory approval. The company has set up four privately managed funds in China, which primarily target institutional clients and a limited number of high net worth individual investors. Two of the funds are currently operational.
To avoid conflicts of interest, Fidelity must liquidate its private fund products or transfer them to its mutual fund platform before deploying mutual fund products, as required by Chinese regulations. Fidelity has six months to start the new business, the CSRC said.
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