* Move comes after Trump imposes steel, aluminium tariffs
* Single foreign entity can own only 30 pct of a listed brokerage
* Only foreign institutions with good reputations will qualify (Adds details, analyst quote)
SHANGHAI/BEIJING, March 9 (Reuters) - China’s securities regulator on Friday published draft rules for allowing foreign financial institutions to gain control of Chinese securities firms, and it vowed to gradually widen the approved scope of business for joint-venture brokerages.
Beijing’s latest move to deregulate its financial sector comes just after U.S. President Donald Trump imposed tariffs on steel and aluminum imports, raising some fears of a trade war between the United States and China.
The China Securities Regulatory Commission (CSRC), citing the draft rules, said the cap on foreign ownership in a Chinese securities firm will be lifted to 51 percent from the existing 49 percent, and the ceiling will be scrapped altogether three years after the new rules take effect.
The elimination of a cap on foreign ownership would fulfill a pledge the Chinese government made in November.
Currently, global investment banks including Goldman Sachs , Morgan , UBS and Credit Suisse operate in China through minority-owned local ventures.
Meanwhile, the ceiling of total foreign ownership in a listed Chinese brokerage will also be raised to 51 percent, from 25 percent, but a single foreign shareholder cannot own more than 30 percent of the publicly-traded brokerage, through trading or negotiated transactions.
In the draft rules, the CSRC raised the bar for overseas investors, saying they must be financial institutions with good international reputations and track records.
The rules will become effective after the CSRC solicits public opinion on them. Critics have said Beijing’s recent moves to open up its multi-trillion dollar financial sector to foreigners were too little, too late.
Larry Hu, an analyst at Macquarie Capital Ltd, said China is likely acting now in a bid to ease tensions between it and the United States.
To help avert a trade war, China’s policymakers “need to offer to further open up its financial sector,” he said. (Reporting by Shanghai and Beijing Newsroom; Editing by Richard Borsuk)