China plans to allow global banks to take a stake of up to 51 percent in their onshore securities ventures for the first time and tie up with local non-financial firms, people familiar with the matter said.
The move, if implemented, would form a key part of China's pledge to ease foreign ownership curbs and allow banks including Credit Suisse, Goldman Sachs, JPMorgan and UBS to bolster their presence in securities business from underwriting to trading.
Currently, foreign banks can only own up to 49 percent of their Chinese securities joint ventures (JVs).
The plan to ease ownership restrictions comes as China faces mounting pressure from Western governments and business lobbies to remove investment barriers and onerous regulations that hobble foreign firms from operating in its markets.
China Securities Regulatory Commission (CSRC) officials have informally allowed some foreign banks to work on their onshore strategies with the planned easing of equity holding restrictions in mind, two of the people said.
The details of the plan to give majority control to foreign banks are expected to be finalized and announced once approved by the State Council, China's cabinet, they said, declining to be identified due to the sensitivity of the issue.
The CSRC, which has been encouraging foreign investment in its bond and stock markets as part of broader efforts to deregulate capital markets, did not immediately respond to a request for comment on Tuesday.
"We continue to evaluate viable options to strengthen our position in China in order to better serve our clients," said a spokeswoman for JPMorgan, which in December sold its 33 percent holding in a China securities venture to its local partner.
JPMorgan, whose other financial services in China include corporate banking and asset management, is in talks to set up a new partnership in China, people with knowledge of the matter have previously said.
Credit Suisse, Goldman Sachs and UBS declined to comment.
So far, the Chinese government has only allowed London-based HSBC to set up a majority-owned securities JV in China, taking advantage of Chinese rules that favor Hong Kong-established banks.
In January, Morgan Stanley became the first foreign bank to receive China securities regulator's approval to boost its stake in its securities venture to 49 percent, up from one-third.