UPDATE 1-Belgium's KBC wins QFII to invest in China markets

(Adds quotes, details and background)

By George Chen

SHANGHAI, June 16 (Reuters) - The asset management arm of Belgian financial services provider KBC Groep NV (KBC.BR) has won approval to invest in China's capital markets under the country's Qualified Foreign Institutional Investor scheme, two sources with direct knowledge of the plan said on Monday.

The news comes a day after the Chinese government said it would study its securities industry and capital markets with a view to pushing forward their opening to the outside world. (For details, click on [ID:nPEK9195])

KBC Asset Management had received formal approval from securities watchdog the China Securities Regulatory Commission for its QFII licence, although it still needed to seek an investment quota from the State Administration of Foreign Exchange, China's foreign exchange regulator, said the sources.

KBC said last month that it had decided to establish a locally incorporated banking unit in China, aiming to tap strong demand for wealth management services in the world's fastest-growing major economy. (For details: [ID:nSHA282677])

"Today's QFII news plus its plan for local incorporation reflect KBC's resolution to accelerate its expansion in China," one of the sources said.

"Compared with Europe, China's capital markets are very young so there are still lots of opportunities for everyone to make money in the long-term perspective," the source added.

A press release is expected to be issued by KBC late on Monday, said the sources, who declined to be identified as they were not authorised to speak to the media.