Blackrock CCB Wealth Management has received the green light from the regulator to launch pension wealth management products in Guangzhou and Chengdu.
The capital raised from the two cities under a pilot programme is capped at RMB 10bn ($1.57bn) initially, during a one- year period. Adjustment can be made after evaluation during the implementation, according to CBIRC’s notice on its website.
Blackrock CCB WM is a joint venture between Blackrock, China Construction Bank (CCB) and Temasek, the Singapore sovereign wealth fund. It gained its China license in May 2021.
The company is 50.1% owned by Blackrock, 40% by CCB Wealth Management — a wholly owned wealth management subsidiary of CCB – and 9.9% by Temasek.
“Blackrock Group is the world’s largest professional management organization for pension, with long-term pension management practice and able to provide valuable international experience,” CBIRC said in the notice.
The regulator also asks Blackrock CCB WM to carry out the pilot project in a “safe and orderly manner”.
“It must do a good job in product design, risk management, sales management, information discusser and investor protection to ensure prudent and compliant business development, safely guard the bottom line of risk,” said the CBIRC.
The regulator has previously designated four banks to pilot pension wealth management, namely, the Industrial and Commercial Bank of China, CCB, China Merchants Bank, and China Everbright Bank.
Starting from 6 December 2021, the first batch of pension wealth management products have been officially launched in four cities: Wuhan, Chengdu, Qingdao and Shenzhen. Any individual investor can purchase pension wealth management products worth up to RMB 3m.
Meanwhile, foreign asset managers are rushing to form joint ventures with Chinese banks in order to conduct wealth management business in China.
CBIRC gave the go-ahead in January 2021 to a joint venture between UK-based asset manager Schroders and Shanghai-headquartered Bank of Communications (BOCOM) Wealth Management.
Deutsche Bank aims to set up a joint venture with the wealth management unit of Postal Savings Bank of China, according to Caixin, which cited “people familiar with the matter” earlier this year.