SHANGHAI/HONG KONG (Reuters) - Fidelity International has become the first global asset manager allowed to launch investment products in China through a wholly-owned local subsidiary, as Beijing further liberalizes its capital markets.
Fidelity said on Wednesday that its Shanghai-based unit has registered with the Asset Management Association of China (AMAC), qualifying it to create onshore investment products for Chinese institutions and wealthy individuals.
Previously, foreign asset managers looking to distribute investment products in China had to operate through minority-owned joint ventures with Chinese firms, but Beijing has been gradually loosening the reins.
A growing number of foreign financial institutions, including Aberdeen Asset Management ADN.L, U.S. hedge fund Bridgewater Associates and Vanguard have recently set up wholly foreign-owned enterprise (WFOE) in China, but they still need AMAC registration to launch onshore products.
“This is a significant milestone to facilitate our expansion in the world’s second-largest economy,” Mark Talbot, managing director, Asia Pacific, Fidelity International, said in a statement.
Since 2004, Fidelity has been offering offshore capabilities to Chinese investors through partnering with banks under the Qualified Domestic Institutional Investor (QDII) scheme, and “this latest development expands our capabilities to support Chinese clients’ needs to invest both onshore and offshore.”
Fidelity also owns a quota of $1.2 billion under the Qualified Foreign Institutional Investor (QFII) scheme, which allows foreign institutions to buy Chinese stocks and bonds.
In a statement on its website, AMAC said it supports more qualified foreign companies to register as private fund management companies in China, in a bid to promote the opening of China’s capital markets.
Fidelity’s subsidiary, FIL Investment Management (Shanghai) Company Ltd, completed its registration with AMAC on Jan 3.
Editing by Jacqueline Wong