UPDATE 1-China faces WTO case over financial news-sources

(Adds third source, background in paragraph 6)

By Alan Wheatley, China Economics Editor

BEIJING, March 2 (Reuters) - The European Union and the United States have decided to launch a joint case against China at the World Trade Organisation over how Beijing regulates foreign financial information providers, three people familiar with the issue said on Sunday.

The Beijing-based sources said China had been informed of the long-expected decision, which will add to strains in economic ties stemming from China's record -- and still fast-expanding -- trade surplus with both the EU and the United States.

Two sources, one of them connected to the financial information industry, said a formal announcement would be made in Geneva, the headquarters of the WTO, on Monday.

A third diplomatic source said final paperwork could delay the announcement.

The sources asked for anonymity due to the sensitivity of the issue. A spokesman for the EU delegation in Beijing said he had no information.

Under the procedures of the WTO, the EU and the United States will request consultations with China. If they fail to resolve the case after 60 days, the matter will be referred to the trade watchdog's dispute settlement body for arbitration.

Both Brussels and Washington object to rules that Xinhua, the Chinese state news agency, issued in September 2006 to preclude foreign companies from directly providing financial information to Chinese clients.