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Fidelity International has obtained Chinese regulatory approval to set up a wholly owned mutual fund unit in Shanghai, foraying into the country’s US$3.5-trillion retail fund market.

The long-awaited approval by the China Securities Regulatory Commission (CSRC) came a year after Fidelity applied to set up the business.

It also came after rival BlackRock became the first global asset manager licensed to start a wholly owned China mutual fund business in early June.

China scrapped foreign ownership caps in its mutual fund and securities sectors on April 1, 2020, under a Sino-U.S. trade deal.

Several other global asset managers, including Neuberger Berman, Schroders PLC and VanEck have also applied to set up wholly owned mutual fund businesses in China.

In a statement on its website, CSRC said that Fidelity’s new China company has registered capital of US$30-million, and can conduct mutual fund and private fund management businesses.

China’s mutual fund market is likely to triple to 60-trillion yuan (US$9-trillion) in a decade, according to an estimate by Shanghai-based fund consultancy Z-Ben Advisors.

But it’s also a highly competitive market crowded with roughly 150 players.

In March, U.S. money manager Vanguard Group dropped plans to obtain a mutual fund license in China, citing a “crowded” market.

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