China

China

Eleven measures to further open up the financial sector

20 Jul 2019

On 20 July 2019, the Financial Stability Development Committee (FSDC) of China's State Council announced the following liberalisation measures in the financial sector: 1) Foreign-invested credit rating agencies can rate all kinds of bonds that are traded on China's interbank market and exchanges. 2) Foreign financial institutions are encouraged to participate in the establishment of or investment in asset management subsidiaries established by Chinese commercial banks. 3) Foreign asset managers are permitted to partner with the subsidiaries of Chinese banks or insurers to establish foreign-controlled asset management companies. 4) Foreign financial firms are allowed to set up or invest in pension fund management companies. 5) Foreign investors will receive support to establish or invest in currency brokerage firms. 6) The transition period to lift the cap on foreign ownership in life insurance companies from 51% to 100% will end in 2020, instead of 2021 as previously announced. 7) The restriction that domestic insurers must hold in aggregate not less than 75% equity stake in an insurance asset management company will be removed and foreign investors can hold more than 25% in insurance asset management companies. 8) The requirement that a foreign insurer investing in China must have at least 30 years of experience of operating an insurance business is abolished. 9) The cap on foreign ownership in securities firms, fund management firms and futures firms (currently 51%) will end in 2020, one year earlier than originally indicated. 10) Foreign-invested financial firms are allowed to obtain type-A underwriting licenses in the interbank bond market. 11) The Chinese government pledges to further facilitate foreign institutional investors’ investment in the interbank bond market.