China Knowledge reported that US based financial holding company JPMorgan Chase & Co has secured regulatory approvals to set up a securities brokerage joint venture in China with First Capital Securities Co to take a bite from China rapidly growing securities market.

Reportedly, JPMprgan signed a memorandum of understating with the Shenzhen based First Capital Securities in March, 2010 to incorporate the JV. JPMorgan will hold a 33% stake in the JV, the maximum that China allows foreign firms to take in the securities JV, the remaining 67% will be taken by First Capital Securities. Pursuant to the country regulations, overseas banks are only allowed to get involved in the securities transactions in China by setting up JVs with local firms.

Through the new JV, JPMorgan will be capable of stocks underwriting, bonds sale and offshore mergers and acquisitions but it is not allowed to offer brokerage services. Like other international investment banks, JPMorgan provides underwriting services to Chinese firms in Hong Kong and New York markets.

(Sourced from China Knowledge)