First prize

5 January 2017 By Pete Sweeney Follow @petesweeneypro

Fidelity International is the first foreign asset manager allowed to create onshore funds and sell them to select mainland buyers. It enters a brutally competitive sector hobbled by capital account controls, and it can’t sell to retail investors. This is still a strategic win.

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Fidelity International became the first foreign asset manager allowed to launch investment products in China through a wholly owned local subsidiary, the company announced on Jan 4.

Fidelity already had a "Wholly Foreign-Owned Enterprise" licence in China that allowed it to help mainland institutions and wealthy individuals invest overseas.

The new licence from the Asset Management Association of China lets Fidelity raise funds onshore from institutions and rich individuals and invest those funds onshore.

The licence does not allow Fidelity to sell retail mutual funds or market directly to ordinary investors. That needs approval from the China Securities Regulatory Commission and would require Fidelity to find a domestic joint-venture partner.

The licence does not constitute an opening of China's capital account as no funds will enter or leave the country.

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