The HSBC Asset Management, through its subsidiary HSBC Asset Management (Europe) Limited, has entered into an agreement to form a joint venture fund management company in Chinese mainland with Shanxi Trust and Investment Corporation Limited (Jintrust), HSBC said Wednesday.

Under the agreement, HSBC Asset Management will take up 33 percent of the equity in the new company for a consideration of 66 million RMB (8 million US dollars), the HSBC Asset Management said in a press release.

The consideration involved in the transaction, representing a capital injection by HSBC into the new company, will be met by HSBC Group internal cash resources.

Jintrust will take the remaining 67 percent in the joint venture company. HSBC, however, will increase its stake in the joint venture to 49 percent when regulations permit this level of foreign shareholding. The transaction is subject to regulatory and other approvals.

The new company will be capitalized at 200 million RMB yuan (24.4 million US dollars), the highest paid-up capital of any fund management company in Chinese mainland so far, HSBC Asset Management said.

A national operating license will be sought for the joint venture company, which will be headquartered in Shanghai. The operating license is expected to allow the company to have the same rights as those of a domestic fund management company. It is envisaged the joint venture company will manage retail mutual funds investing in equities and bonds in China's domestic securities markets, according to HSBC Asset Management.

Source: Xinhua