UPDATE 1-Daiwa asset JV seeks $300 mln quota for China market

* Daiwa SB Asset Management seeks $300 million QFII quota

* Daiwa Securities expects M&A in Asia next year

* Hong Kong Daiwa's new Asia headquarters (Adds comments, details, background and byline)

By Farah Master

HONG KONG, Nov 26 (Reuters) - Daiwa SB Asset Management is seeking a $300 million investment quota from Chinese regulators to tap the country's fast growing capital markets, part of Daiwa's ambition to expand outside Japan where it is already a market leader.

Daiwa SB, a joint venture between Daiwa Securities Group (8601.T) and Sumitomo Mitsui Financial Group (8316.T), has applied to Beijing for the quota under China's Qualified Foreign Institutional Investor (QFII), said Takashi Hibino, deputy president of Daiwa Securities Group.

Foreign institutional investors must have a QFII licence and approved foreign exchange quota under the licence to buy domestic shares or bonds, according to Chinese securities rules.

Daiwa, Japan's second-largest brokerage, aims to become one of the top five brokers and one of the top 10 investment banks in Asian ex-Japan markets by 2012 and 2013 respectively, Hibino said at a media briefing.

"We absolutely understand that these are very ambitious targets considering our current position, but we also recognize that we have to be bold and truly transport our business and commitment to Asia to yield results," said Hibino.