China

BlackRock receives approval to establish China Mutual Fund Unit

BlackRock has reportedly received regulatory approval from the China Securities Regulatory Commission (CSRC) to establish a mutual fund unit in China.

The approval marks BlackRock as the first global asset manager to be bestowed with the opportunity of tapping into what is a sector with a valuation of USD2.58 trillion, according to an article shared by Zawya.

The new wholly-owned subsidiary would further bolster BlackRock’s onshore presence in China’s asset management market, adding to its already-established joint venture, a wealth management operation set up with Temasek and China Construction Bank. In addition, BlackRock operates a private fund unit in Shanghai.

The opening of the Chinese market comes on the heels of an interim trade agreement inked between China and the USA in January 2020. Following on from this, both BlackRock and Neuberger Berman applied to establish mutual fund units in April 2020, as the Chinese government scrapped foreign ownership caps in the sector.

Several other asset management firms are expected to follow suit, with Fidelity International reportedly already submitting an application to Beijing.

In a similar vein, Vanguard Group has also announced that it will relocate its Asian headquarters to Shanghai, closing its Hong Kong operations.

From the date of the approval, CSRC has reported that BlackRock now has 6 months to establish its new unit in China.