By Zhang Yan and Julie Zhu
BEIJING/HONG KONG (Reuters) - Goldman Sachs <GS.N> and Morgan Stanley <MS.N> said on Friday they had received the final regulatory approvals to take majority stakes in their China securities joint ventures, as Beijing continues to open its financial sector to foreigners.
The approvals come as policymakers and authorities step up efforts to shield the world's second-largest economy, battered by the coronavirus pandemic.
Goldman and Morgan Stanley received the nods from the China Securities Regulatory Commission to raise their stakes in Goldman Sachs Gao Hua Securities and Morgan Stanley Huaxin Securities from 33% to 51% and 49% to 51%, respectively, the two Wall Street banks said in separate statements.
Majority ownership of the joint ventures potentially allows the U.S. banks to expand operations in China, and better integrate them with their global businesses.
Goldman in 2004 set up its China securities JV with Beijing Gao Hua Securities, which was co-founded by veteran Chinese banker Fang Fenglei.
Unlike most of the other China JVs, Goldman already has day-to-day operational control of its JV, which offers investment banking services such as equities and bond underwriting and deal advice.
Despite that managerial control, Goldman has long made it clear it would eventually seek to take a majority stake too.
Shanghai-based Morgan Stanley Huaxin Securities was established in 2011 and its existing operations include underwriting and sponsoring equity and debt offerings as well as proprietary trading of bonds, it says on its website.
China raised the cap on foreign ownership of securities operations to 51% in 2018. Until then international banks had been allowed only minority stakes in their Chinese joint ventures.
Swiss lender UBS <UBSG.S> became the first foreign bank to hold a majority stake in a China securities business under the new rules in 2018. Japanese brokerage Nomura Holdings <8604.T> and JPMorgan <JPM.N> got their approvals last year.
Credit Suisse <CSGN.S> is still awaiting approval after it submitted an application for majority-controlled securities JV.
Beijing promised to scrap foreign ownership caps on securities firms and mutual funds for foreign investors from April 1, in an interim Sino-U.S. trade deal signed in January.
The approvals for Goldman and Morgan Stanley come a day before China temporarily bars entry for most foreigners as an interim measure in response to the coronavirus epidemic.
Market participants said the thumbs up was a sign the country is continuing with the formal opening up of financial markets, despite the virus.
Last Friday, Shanghai said some of the world's top financial institutions, including BlackRock and JPMorgan, were stepping up investments in China's financial hub, undeterred by the pandemic.
(Reporting by Zhang Yan in Beijing and Julie Zhu in Hong Kong; Additional reporting by Alun John in Hong Kong; Editing by Edmund Blair, Clarence Fernandez and Mark Potter)