On July 20, the Office of Financial Stability and Development Committee under the State Council announced a series of policies to further expand financial opening-up, among which the timeline of removing foreign ownership limits in foreign-invested securities companies, fund management firms, and futures companies is brought forward to 2020, one year ahead of the original schedule. The CSRC took questions from the media in this regard.
Q: What is the background of introducing this opening-up policy? What are the positive implications of this new policy on the securities, fund management, and futures sectors? How will the policy be implemented?
A: In the recent years, the CSRC has been pursuing high-level opening-up of China’s capital markets by unswervingly implementing the decisions and plans of the CPC Central Committee and the State Council. Earlier in 2018, it was announced that foreign ownership limits in foreign-invested securities companies, fund management firms, and futures companies be relaxed to 51% and be fully removed in three years. With the adoption of the Administrative Measures for Foreign-Invested Securities Companies and Administrative Measures for Foreign-invested Futures Companies, the relaxation of such foreign ownership limits has been faithfully carried out with administrative approvals granted to four joint-venture securities companies and fund management firms where foreign investor takes the majority ownership. In addition, many foreign institutions have since then demonstrated greater commitments to increasing investments in China and contributing to the development of China’s capital markets. The positive effects of the opening-up policies and encouraging market feedback have created favorable conditions to accelerate the pace of opening-up of the securities, fund management, and futures sectors.
Bringing the implementation time forward to 2020 is an important step taken by the CSRC to implement the directives of the CPC Central Committee and the State Council in deepening the supply-side structural reform of the financial sector and further improving accessibility of quality financial services. Pushing for reform and development through opening up, it also represents China’s firm resolution and confidence in moving toward deeper institutional reform and greater openness. The past three decades have seen tremendous achievements in China’s securities, fund management, and futures sectors. Through opening up, it is not only in the interests of the securities industry to grow and prosper in a pro-business environment that fosters healthy competition, but also to the benefits of serving high-quality economic development and people’s well-being with better financial services.
Moving forward, the CSRC will set up working arrangements in due course to materialize the policy in practice. In the meantime, the CSRC will continuously improve its regulatory capability in order to meet new challenges in an increasingly open environment and safeguard steady progresses in the opening-up of the financial markets and services sector.