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BlackRock, Schroders win China PFM licence

BlackRock, Schroders win China PFM licence

BlackRock and Schroders’ wholly foreign-owned enterprises (WFOE) in Shanghai have obtained the private securities investment fund manager (PFM) licence from the Asset Management Association of China (AMAC).

The licence enables the duo to offer onshore investment products such as equities, fixed income and multi-assets to high-net-worth individuals and institutional investors for domestic investment.

BlackRock’s onshore China investment quotas under Qualified Foreign Institutional Investor and Renminbi Qualified Foreign Institutional Investor schemes currently amount to approximately $9.5 billion.

For Schroders, this announcement follows its upgrade to an investment management WFOE in June 2017.

The firm offers investment services in China through the Qualified Domestic Institutional Investor system. It also launched the Asian multi-asset income strategy under the Mutual Recognition of Funds scheme.

Yin Ge, a Shanghai-based partner at Han Kun Law Offices, focusing on China’s asset management industry told Citywire Asia that last year there were about ten PFM WFOEs registered with AMAC.

‘Generally, we see increasing interest in obtaining such a license among international asset managers, so it is likely that more PFM WFOEs will register with AMAC in the new year.’

Ge said that for the time being, PFM WFOEs may engage in local private securities investment fund management business in China.

‘To offer the private fund products launched by the PFM WFOEs, international asset managers may further raise their brand awareness in China and build connections with the local distribution channels.

‘In the future, PFM WFOEs may engage in public fund business subject to certain qualification criteria and may even make overseas investment if Qualified Domestic Institutional Investor licence becomes available,’ she continued.

‘Therefore, strategically PFM WFOE seems to be a good move to tap the market for now and also prepare for future opportunities.’

Last December, Aberdeen Standard Investments secured its PFM licence, following in the footsteps of Fidelity International, UBS Asset Management, Fullerton Fund Management and Man Group, among others.

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