Manulife Teda Fund Management, a joint venture between Manulife Financial and Northern International Trust & Investment, submitted the application last October, according to the China Securities Regulatory Commission.
Others applicants are all domestic firms including Huashang Fund Management and Western Leadbank Fund Management.
The proposed stricter rules, reported by mainland media last week, said fund houses which wish to open a new subsidiary must have two years of history, with assets under management (mutual funds excluding money market funds) no less than RMB 20bn ($3.05bn), and net assets of at least RMB 600m.
Although Manulife Teda meets some of the stricter requirements, the report said, it might not pass the net assets criteria.
The firm has a registered capital of RMB 180m and currently manages 31 mutual funds, according to its website. The AUM of mutual funds excluding money market funds reached RMB 23.1bn, the report said.
Among the other six applicants, four fund management companies did not meet the two-year threshold, while Western Leadbank does not meet the AUM standard, the report noted.
The CSRC confirmed it is drafting rules to oversee subsidiaries more closely. As of March, 79 fund houses had subsidiaries that managed assets worth in total RMB 9.84bn ($1.5bn).
Subsidiaries of fund management companies used to be more loosely regulated than investment vehicles such as trusts and asset management arms of brokers, as the regulators want to promote product innovation.
Z-ben Advisors, a consultant, said in a report that most fund house subsidiaries would not meet the proposed capital requirements.
Foreign joint ventures such as Ping An UOB Fund Management, AXA SPDB Investment Managers and Bank of Communications Schroder Fund Management, derive about 90% of AUM (subsidiary and public mutual funds) from their subsidiary business, according to Z-Ben.
"Foreign firms need to engage their domestic joint venture partners to ascertain where they stand in light of these proposed reforms. But more importantly, decide what will be required from the JV relationship in the immediate future," the report said.