Investment funds partner, Alywn Li, recently featured in Asia Asset Management in the wake of Manulife securing a Wholly Foreign-Owned Enterprise (WFOE) licence from the China Securities Regulatory Commission.
In June 2016, China had set out requirements on how WFOEs and Sino-foreign asset management joint ventures could be registered under the Asset Management Association of China (AMAC) as onshore private fund houses. Alwyn commented that Manulife seems to have stolen a march on other WFOEs to participate in onshore private fundraising by applying for the licence after the launch of the AMAC registration initiative. It may take longer for existing WFOEs to get the investment company qualification, he pointed out.
Alwyn concluded that it is unlikely that other foreign institutions will rush into the WFOE market given its stringent conditions, such as the requirement that an applicant must own a majority stake in an existing entity in China.