HONG KONG: 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 would allow banks including Credit Suisse, Goldman Sachs, JPMorgan and UBS to bolster their presence in securities business - from underwriting to trading - in the world’s second-largest economy.

Currently, Western banks can only own up to 49 percent of their Chinese securities joint ventures. That lack of control and limited contribution to revenue have long been a source of frustration.

The plan to ease ownership restrictions comes as Beijing 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 finalised and announced once approved by the state council, they said, declining to be named due to the sensitivity of the issue.

News of Beijing’s possible easing of ownership restrictions in the securities sector comes as US President Donald Trump is set to visit China as part of his five-nation Asia trip.

Trump’s visit to China, which starts on Wednesday, comes amid frustration in parts of the US business community, including finance, over discriminatory Chinese policies and market access restrictions in various sectors.

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 an emailed 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.—Reuters