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SHANGHAI, May 19 (Reuters) - Fidelity International, the U.S. asset management giant, said on Tuesday it has applied to set up a wholly owned mutual fund unit in China, taking a major step toward tapping the country's retail fund market.
Fidelity submitted the application to China's securities regulator after Beijing scrapped foreign ownership caps in the mutual fund sector on April 1.
"The application for a mutual fund license is an important milestone in our China strategy," Daisy Ho, China President of Fidelity International, said in a statement.
Fidelity will "continue to devote resources to expand our capabilities and develop more solutions" in China, she said.
Obtaining a mutual fund licence would allow Fidelity to target China's individual investors, a client base coveted by the company. Currently, Fidelity sells private funds in China targeting mainly institutions and high-net-worth investors.
Asset management giant BlackRock and Neuberger Berman have also applied to set up mutual fund units in China. Schroders plans to apply for the licence, the Shanghai government has said.
China is accelerating the opening up of its financial industry amid renewed tension with the United States over its handling of the coronavirus pandemic.
Earlier this month, China scrapped quotas under two key inbound investment channels, QFII and RQFII.
"More and more countries are imposing restrictions on investment, but China has been going in the opposite direction," said Lyndon Chao, managing director of the Asia Securities Industry & Financial Markets Association (ASIFMA).
"As long as China's market remains open ... you're going to see more and more foreign investment into China. It's natural." (Reporting by Andrew Galbraith and Samuel Shen ; editing by Jason Neely)