The China Securities Regulatory Commission (CSRC) said on Thursday that the country's fund association, the Asset Management Association of China, will specify details about the registration of foreign fund firms, allowing them to launch products in China.
China already allows qualified foreign hedge funds to set up operations in the country, the CSRC said on its website.
But without registering with China's fund association, foreign hedge funds cannot launch funds locally.
Since the nation joined the WTO in 2001, the securities sector has been gradually opening up to foreign investors, who were allowed to set up joint ventures in China to operate fund management businesses.
Originally, a venture could have a maximum of 33 percent of foreign capital in its total stake, the Xinhua News Agency reported on Thursday.
The CSRC has raised the ceiling to 49 percent for foreign capital in a company's total stake.
Giving permission to foreign fund companies to enter the Chinese capital market will help diversify the base of institutional investors and create a favorable competition environment in the sector, Xinhua noted, citing unidentified industry sources.
However, the sources noted that there will not be many foreign fund firms entering initially, as the application process takes time.
China has been pursuing reform of its financial markets in recent years. For example, the Qualified Foreign Institutional Investor program, which was created to allow foreigners to invest in Chinese capital markets, had its quota lifted to $81.18 billion at the end of June, from $81.098 billion at the end of May, the State Administration of Foreign Exchange said on Thursday.
