SHANGHAI :Fidelity International has obtained Chinese regulatory approval to set up a wholly-owned mutual fund unit in Shanghai, giving it a toehold in the country's US$3.5 trillion retail fund market.
The long-awaited approval by the China Securities Regulatory Commission (CSRC) came a year after Fidelity applied to set up the business.
It also came after rival BlackRock [BLK.N] became the first global asset manager licensed to start a wholly owned China mutual fund business in early June.
In an emailed statement, Fidelity said it will continue to make preparations and looks forward to receiving CSRC's approval for business operations.
"We hope to marshal our experience and knowledge accumulated all over the world to provide domestic investors with the best investment solutions to meet their needs," it said.
China scrapped foreign ownership caps in its mutual fund and securities sectors on April 1, 2020, under a Sino-U.S. trade deal.
Several other global asset managers, including Neuberger Berman, Schroders PLC and VanEck have also applied to set up wholly owned mutual fund businesses in China.
Meanwhile, global banks including JPMorgan and Morgan Stanley are moving toward full ownership of their China mutual fund ventures.
In a statement on its website, CSRC said that Fidelity's new China company has registered capital of US$30 million, and can conduct mutual fund and private fund management businesses.
China's mutual fund market is likely to triple to 60 trillion yuan (US$8.75 trillion) in a decade, according to an estimate by Shanghai-based fund consultancy Z-Ben Advisors.
But it's also a highly competitive market crowded with roughly 150 players.
In March, U.S. money manager Vanguard Group dropped plans to obtain a mutual fund license in China, citing a "crowded" market.
(Reporting by SHANGHAI NEWSROOM; Editing by Toby Chopra and Kim Coghill)