SHANGHAI (Reuters) - BlackRock (N:BLK) and Neuberger Berman on Wednesday became the first global asset managers to submit applications to set upmutual fund units in China as Beijing pushes ahead with financial sector deregulation despite the coronavirus pandemic.
The China Securities Regulatory Commission said it has accepted applications from the two money managers as the country scraps foreign ownership caps in the sector on April 1 as planned.
"China is making as clear as China can make clear in its intention that this is a market that is open to foreign participation," said Peter Alexander, founder and managing director of fund consultancy Z-Ben Advisors.
"China is trying to demonstrate in this period of heightened uncertainty in Europe and the United States that they were able to work through very successfully the COVID-19 virus, and that very quickly they were able to get back to business as usual."
The announcement came a day after the city government of Beijing said it had launched an outbound investment scheme that attracted applicants including Oaktree, Bridgewater and Amundi.
It also follows China's approval to Goldman Sachs (N:GS) and Morgan Stanley (N:MS) to take majority stakes in their China securities ventures.
A mutual fund unit would expand the China footprint of BlackRock, which already owns a private fund management unit and a joint venture mutual fund house in China.
"We are pleased to have taken this next step in pursuing our onshore presence in China, a market where we expect to see rapid growth in financial assets," Geraldine Buckingham, BlackRock's Chair of Asia Pacific, said in a statement.
"We firmly believe that China is one of the biggest opportunities for BlackRock over the long term."
The applications were expected, as China agreed to fully open its mutual fund and brokerage sectors on April 1 as part of the interim Sino-U.S. trade deal signed in January.
Other global asset managers including Fidelity International and Schroders (LON:SDR) also plan to submit applications once rules allow, the government of Shanghai said last month.
Fidelity said China is a critical market for the fund manager and it would apply for mutual fund management license when ready. Schroders was not immediately available for comment.