JP Morgan sets up China’s first AM WFOE

Added 6th September 2016

The asset management wholly foreign-owned enterprise (AM WFOE) is expected to have wider business scope than the three investment management WFOEs approved earlier.

JP Morgan sets up China’s first AM WFOE

The new entity, JPMorgan Asset Management (Shanghai), was set up in August 24, according to a filing on the Shanghai Industry and Commerce Administration website.

The firm’s legal representative is Desiree Wang Qionghui, JP Morgan Asset Management head of China, with registered capital of $1m, according to the filing.

The business scope includes asset management, investment management, investment consulting and other general consultancies.

“Establishing the AM WFOE will further strengthen our on-the-ground presence in mainland China,” said JPM AM Asia Pacific CEO Michael Falcon, in a statement.

In July, Chinese authorities permitted China-focused investment products for mainland high net worth or institutional investors to be launched through the WFOE strcuture. However, some confusion remains. A JPM AM spokesman noted that the authorities have not clearly defined the differences between an AM WFOE and IM WFOE, although the latter does not include “asset management” in the business scope.

He believes the business scope is wider for an AM WFOE. The firm is still studying the licenses to apply for and has no timeline on starting operations, he added.

Both types of WFOEs are expected to be able to manage onshore money into onshore investments. So far, Aberdeen, Fidelity and US hedge fund Bridgewater Associates have secured IM WFOE licenses.

“There are another dozen-plus firms that are approaching the finish line [to gain approval to set up a wholly-owned investment platform in Shanghai],” acccording to a report from China consultancy Z-ben Advisors.

“Brand and size can facilitate approvals but the market strength has to be there to support internal plans," Z-ben director of operations Chantal Grinderslev added.

Highest MRF sales

JPM AM has been active in China. CIFM, or China International Fund Management, is a joint-venture between JPM AM and state-owned Shanghai International Trust, where the former holds a minority 49% stake.

With roughly 50 mutual funds, it is ranked the 21st biggest onshore mutual fund manager by assets under management (RMB 92bn) as of June 30. CIFM also has a subsidiary running segregated account asset management service, targeting non-retail investors.

JPMAM has also become the biggest winner in the mutual recognition of funds (MRF) scheme, which permits cross-border fund sales.

The JP Morgan Asian Total Income Bond fund, which is for sale to onshore investors, took nearly 90% of the total net sales of nothbound MRF funds since the program began in the beginning of the year. 


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