Morgan Stanley and Goldman Sachs have received regulatory approval to buy majority stakes in their joint ventures in China.

This is against the backdrop that China has made efforts in economic reform and further opening-up of its financial market. The removal of foreign ownership caps was realized in banks and financial assets management in May 2018. In 2019, the Chinese Banking and Insurance Regulatory Commission, China Banking Regulatory Commission (CSRC) and the State Council laid out further liberalization measures for foreign financial institutions to conduct business in China.

Morgan Stanley announced on Friday that it has received approval from the CSRC to take a majority stake in its China securities joint venture, Morgan Stanley Huaxin Securities Company Limited. It will increase its shareholding from 49 to 51 percent.

Goldman Sachs announced on the same day that it has been approved by the CSRC to increase its ownership in its China joint venture, Goldman Sachs Gao Hua Securities Company Limited (GSGH), from 33 to 51 percent.

"This is a significant milestone in the evolution of our business in China. We will now be seeking to implement as soon as possible the migration of business units currently operating under Beijing Gao Hua Securities across to one single corporate entity, GSGH. Concurrently, we will be seeking to move towards 100 percent ownership at the earliest opportunity," said Todd Leland, co-President of Goldman Sachs in Asia Pacific ex-Japan.

Wei Sun Christianson, Asia-Pacific Co-CEO and CEO China of Morgan Stanley, said China is a core strategic focus for the firm and they look forward to further investment in Morgan Stanley Huaxin Securities to provide better advice and services to clients.

Based in Shanghai, Morgan Stanley Huaxin Securities was jointly founded by Huaxin Securities and Morgan Stanley in 2011. Goldman Sachs Gao Hua Securities was established in 2004 as a joint venture between Goldman Sachs and Beijing Gao Hua Securities, which was established in the same year.

According to the CSRC, the limits on foreign ownership of securities and fund management firms in China will be lifted starting from April 1. The move has attracted many foreign companies that seek to set up wholly-owned subsidiaries.

(With input from Xinhua)