Boston, MA 05/22/2014 (wallstreetpr) – The Wall Street Journal on Thursday reported that The Bank of New York Mellon Corporation (NYSE:BK) has agreed to sale its 49% stake in its China joint venture. Citing source close to the matter, WSJ said that the bank has submitted a plan to the securities regulator in China to sell its stake in The Bank of New York Mellon Western Fund Management Co. The China’s regulator is expected to clear the deal soon, but the size of the deal value is not yet revealed.
China-Venture
The Bank of New York Mellon Corporation (NYSE:BK)’s Chinese venture was established in July 2010 and is based in Shanghai, with a registration capital of $32 million ($200 million yuan). The remaining stake in the venture is retained by Chinese brokerage company, Western Securities Co, located in Shaanxi Province of China. Both the stakeholders have turned down to comment on the subject matter. It is speculated that the Shanghai-based firm, Shanghai Leadbank Asset Management Co. will purchase the stake.
Ease Of Regulatory Framework
Since there has been a bit of loosening from the China’s regulators over the kind and range of products to be offered to the investors by financial institutions, the space is seeing increased activity from foreign companies, which are looking to tap into the opportunity and stand to take benefit from the increasing appetite of Chinese investors’ higher yielding products. The Chinese government opened its strictly regulated mutual fund industry to a wider range of asset managers last year, as a part of its effort to liberalize its financial sector and to attract the inflow of more funds. This has resulted in making several financial intermediaries like venture capital firms, asset management companies and brokerage houses, eligible to source money from investors in a pool to employ it in securities investments. Earlier, only few licenses firms were allowed to sell such types of funds.
