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AB targets China’s retail investors

At least six foreign players have concrete plans to establish a public mutual fund company in the mainland.

New York-headquartered Alliance Bernstein (AB) filed an application with the China Securities Regulatory Commission (CSRC) yesterday to set up a public mutual fund company in the mainland, according to the regulator’s records.

This move will enable the firm to tap China’s RMB 17.8trn ($2.69trn) retail mutual fund market.

FSA sought more information, but the firm declined to provide more details as the application is still subject to regulatory approval.

AB’s application just comes after New York-headquartered Van Eck applied for the licence in late-October. Other firms that have applied for a public mutual fund licence include Blackrock, Neuberger Berman and Fidelity. So far, only Blackrock has received a greenlight from the regulator to set-up its operations, although it needs another approval to start selling its mutual funds.

Vanguard is also preparing for the application after it appointed Luo Dengpan as its general manager for the yet-to-be-established retail fund management company (FMC) in China in September, which is a significant step before a firm can apply for the license.

AB already has set-up in the mainland previously, targeting the country’s institutions and HNWIs. It has both the private fund management (PFM) and qualified domestic limited partner (QDLP) qualifications in China, which enable the firm to provide onshore (PFM) and offshore (QDLP) solutions to domestic qualified investors.

The firm received its PFM licence last year and has one private fund product – the AB China A-share Private Fund No 1, according to records from the Asset Management Association of China.

Meanwhile, its QDLP business was established in 2018. Its QDLP product, the AB Global High Yield Bond Private Fund, received regulatory approval in 2018.

Part of the Mark Allen Group.