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Banks Enter Funds Management

China has approved the establishment of fund management ventures by local commercial banks, which is expected to attract foreign money managers seeking partners in the country, China Radio International reported. 

The move is a breakthrough in the Chinese financial sector because the government has until now prohibited banks from directly owning securities companies.

Formal regulatory rules will likely be released this year.

Formerly, Chinese banks had begun preparations for entering the funds management business and had been in discussion with potential partners.

The banks may have one or two foreign partners, but foreign stakes will be limited to 33 percent.

Allowing commercial banks into the funds management business is considered an important reform.

Previously, banks were too reliant on revenues from the difference between loans and deposit rates.

The reform will enable more funds to flow into the stock market. (Xinhuanet)