Linklaters Zhao Sheng advises Schroders in preparations to establish a Sino-foreign wealth management joint venture

03 Mar 2021

In July 2019, in order to facilitate the further opening up of the financial industry, the Financial Stability and Development Committee under the State Council permitted offshore asset management institutions to apply to set up foreign majority controlled joint venture wealth management companies with a subsidiary of a mainland Chinese bank or insurer. These measures aim to bring international expertise to the emerging asset management industry and capital market in mainland China.

On 22 February 2021, the China Banking and Insurance Regulatory Commission (CBIRC) approved the establishment of Schroder Bank of Communications Wealth Management Co., Ltd. (Schroder BOCOM Wealth Management JV) in Shanghai in relation to Schroder Investment Management Ltd (Schroders) and BOCOM Wealth Management Co., Ltd (BOCOM Wealth Management). The Schroder BOCOM Wealth Management JV will be majority owned by Schroders with a 51% stake, while BOCOM Wealth Management will hold 49% of the shares. The Schroder BOCOM Wealth Management JV is the third Sino-foreign wealth management joint venture to have received regulatory permission to prepare the establishment. This is the latest collaboration between Schroders and Bank of Communications in the asset management space since the establishment of BOCOM Schroders Fund Management in 2005. Schroders’ global investment capability, distribution network and client servicing resources complement those of BOCOM Wealth Management, creating a strong synergy between the two businesses.

The joint operation of Linklaters and Zhao Sheng Law Firm (Zhao Sheng) (Linklaters Zhao Sheng) acted for Schroders advising upon preparation for establishment of the Schroder BOCOM Wealth Management JV and both international and Chinese legal services were provided. The team was led by Linklaters’ corporate partner John Xu and Zhao Sheng’s corporate partner Colette Pan.

Linklaters Zhao Sheng combines Linklaters’ long-standing experience on international transactions and Zhao Sheng’s high-quality Chinese law capabilities. The joint operation has a track record of providing seamless “one stop” international and Chinese legal services to onshore and offshore clients, particularly in relation to cross-border transactions and significant projects in the financial sector. With the gradual relaxation of foreign restrictions imposed on the financial asset management sector, Linklaters Zhao Sheng is well positioned and expects to represent more offshore asset management institutions on their investments in the mainland Chinese market.