May 3, 2018 / 3:23 AM / 9 months ago

UBS seeks regulatory nod for 51 percent controlling stake in China JV

FILE PHOTO: The logo of Swiss bank UBS is seen at a branch office in Zurich, Switzerland January 22, 2018. REUTERS/Arnd Wiegmann/File Photo

SHANGHAI/BEIJING (Reuters) - UBS Group (UBSG.S) is looking for a controlling stake in its China joint venture, UBS Securities Co, after the country’s securities regulator announced new rules earlier this year easing restrictions on foreign ownership of brokerages.

UBS Securities has submitted an application to the regulator seeking approval for UBS to raise its stake in the JV to 51 percent, UBS said in an emailed statement on Thursday.

It currently has about a 25 percent stake in the JV, UBS Securities’ website shows.

Previously, Western banks could only own up to 49 percent of their Chinese securities JVs. The lack of control and limited contribution to revenue have long been a source of frustration.

The China Securities Regulatory Commission (CSRC) is reviewing UBS’ application, the statement added.

“The further opening up of China’s financial sector represents great opportunities for our China businesses, including investment banking, wealth management and asset management,” a spokeswoman said in the statement.

While restrictions have eased, some Western banks fear high asset-value requirements and limits to ownership by non-financial investors could stymie broad participation.

Reporting by Engen Tham and Shu Zhang; Editing by Himani Sarkar

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