JPMorgan’s Chinese business receives approval

10 January 2011

JPMorgan and Morgan Stanley’s new Chinese joint venture has been given the go-ahead by regulators in the state.

The two financial institutions have been provided with approval to set up businesses dealing with securities by the China Securities Regulatory Commission.

Permission from the organisation will allow both banks to underwrite stocks and bonds in the country and form joint ventures.

JPMorgan is planning to hold a 33 per cent stake in a collaboration with Shenzhen-based firm First Capital Securities while Morgan Stanley is looking to maintain the same sized share in Huaxin Securities.

Zili Shao, chairman and chief executive officer of JPMorgan's China's business, told Reuters: "This was a gap we had in our franchise which we have filled now. But we have a lot of work to do to make best use of this platform.”

The approvals are thought to be the first given to any major banks since Goldman Sachs was allowed to establish its Gaohua Securities joint venture in 2004.

Morgan Stanley, UBS and Deutsche Bank have all previously operated joint ventures in China although this business is the first for JPMorgan in the state.

By Jim Ottewill

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