China takes another big step to open its financial markets

A foreign bank has been given access to a key piece of China's financial system for the first time.St...

Posted: Oct 29, 2018 1:27 PM
Updated: Oct 29, 2018 1:27 PM

A foreign bank has been given access to a key piece of China's financial system for the first time.

Standard Chartered (SCBFF) said Monday that it is the first foreign lender to receive permission to hold and safeguard the assets of local investors in China.

Asia

China

Continents and regions

East Asia

Companies

Standard Chartered PLC

Banking, finance and investments

Business, economy and trade

Economy and economic indicators

The license granted by the China Securities Regulatory Commission allows the bank to act as a custodian for investment products sold by both international and local asset managers and funds.

Standard Chartered is based in London but focuses on emerging markets. Its shares jumped nearly 2%.

"This is a big step forward in the further opening up of China's domestic financial markets and a testament to our commitment to supporting China's financial reform and innovation," Jerry Zhang, CEO of Standard Chartered in China, said in a statement.

Acting as a custodian can be a big business. One of the leading global players, JPMorgan Chase, had assets worth more than $23 trillion under management in 2017, generating $3.9 billion in revenue for its securities services business.

Big Western banks have been trying to break into China for years, but their progress had been slowed by restrictions on their activities and rules that limited them to minority ownership of ventures in the country.

Only HSBC (HSBC) has a significant presence through its 19% stake in China's Bank of Communications.

This year, China has accelerated reforms aimed at giving foreign banks greater access to the country's massive financial markets and wealthy investors.

The government pledged last November to allow foreign companies to own Chinese banks and investment firms. UBS (UBS) took the plunge in May, saying it would seek control of its joint venture in China by upping its stake in the business to 51%.

Nomura (NMR) and JPMorgan Chase (JPM) have also sought permission to launch majority-owned brokerages in China after the government relaxed its rules.

Article Comments

West Lafayette
Overcast
16° wxIcon
Hi: 27° Lo: 16°
Feels Like: 16°
Kokomo
Clear
15° wxIcon
Hi: 25° Lo: 16°
Feels Like: 5°
Rensselaer
Overcast
18° wxIcon
Hi: 25° Lo: 14°
Feels Like: 9°
Fowler
Overcast
18° wxIcon
Hi: 25° Lo: 15°
Feels Like: 9°
Williamsport
Overcast
22° wxIcon
Hi: 27° Lo: 17°
Feels Like: 13°
Crawfordsville
Overcast
21° wxIcon
Hi: 26° Lo: 17°
Feels Like: 15°
Frankfort
Broken Clouds
17° wxIcon
Hi: 25° Lo: 17°
Feels Like: 10°
Delphi
Overcast
18° wxIcon
Hi: 26° Lo: 16°
Feels Like: 8°
Monticello
Overcast
18° wxIcon
Hi: 25° Lo: 17°
Feels Like: 8°
Logansport
Overcast
19° wxIcon
Hi: 24° Lo: 16°
Feels Like: 9°
Brief cold snap.......
WLFI Radar
WLFI Temps
WLFI Planner

Community Events