UBS is Applying For a Fund License in China
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As China gradually opens its financial markets to Western institutions, UBS wants to expand its stake in a joint venture there.
Swiss bank UBS is in informal talks with China’s securities regulator. The firm wants to apply for a license to sell mutual funds as soon as possible. UBS became the first foreign bank in China to seek a majority stake in its local investment banking unit after regulators lifted limits in 2018, relaxing the rules further in 2019.
That opened the door for other institutions to follow suit, including Blackrock, Goldman Sachs, and JP Morgan Chase, which have since obtained various licenses from Chinese regulators to expand their businesses in the Middle Kingdom.
UBS has a 49 percent stake in a joint venture with state-owned SDIC Taikang Trust and has been in talks with its Chinese partner to take control of the company. However, the two parties failed to reach an agreement according to people familiar with the matter.
In the past, UBS has held talks with insurer China Life Insurance and the Industrial & Commercial Bank of China, about setting up joint ventures in wealth management. The negotiations failed to reach an agreement and ICBC eventually set up an asset management joint venture with Goldman Sachs.
Questions & Answers
Q.What kind of license is UBS applying for in China?
What kind of license is UBS applying for in China?
UBS is seeking a license to sell mutual funds in China. This move is part of their strategy to expand their presence in the gradually opening Chinese financial markets.
Q.Which other Western institutions have expanded their businesses in China following regulatory changes?
Which other Western institutions have expanded their businesses in China following regulatory changes?
Blackrock, Goldman Sachs, and JP Morgan Chase have all obtained various licenses from Chinese regulators. They have expanded their operations after rules were relaxed in 2018 and 2019.
Q.What is UBS's current stake in its joint venture with SDIC Taikang Trust?
What is UBS's current stake in its joint venture with SDIC Taikang Trust?
UBS currently holds a 49 percent stake in its joint venture with state-owned SDIC Taikang Trust. They have been in talks to take control but an agreement was not reached.
Q.With which other Chinese companies has UBS previously discussed forming joint ventures?
With which other Chinese companies has UBS previously discussed forming joint ventures?
UBS has previously held talks with insurer China Life Insurance and the Industrial & Commercial Bank of China. These discussions were about setting up wealth management joint ventures, but no agreements were reached.
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