Morgan Stanley to Increase Stake in China Brokerage to 94%

The US financial services giant Morgan Stanley plans to increase its stake in its Chinese brokerage venture to 94% with a payment of 998 million yuan ($110 million), an exchange filing showed on Wednesday.

The brokerage business is a joint venture established by Morgan Stanley and China Fortune Securities company in 2011. 

The change requires the approval of the China Securities Regulatory Commission (CSRC) and other government authorities. If the purchase succeeds, Morgan Stanley would effectively own 94 percent of the securities joint venture, which equals to 1.71 billion yuan ($268 million) in capital. China Fortune will retain the remaining 5.94 percent stake, down from the current 10 percent of the fund joint venture.

​Since China first permitted foreign-majority ownership in some financial businesses in 2019, global banks and asset managers have been boosting their stakes in their Chinese joint ventures. Most recently, the China Banking and Insurance Regulatory Commission approved plans by Goldman Sachs to acquire a majority stake in its mainland securities venture, making it the latest global bank to take advantage of Beijing's commitment to ease foreign-ownership restrictions.