By Sumeet Chatterjee
HONG KONG (Reuters) - JPMorgan Chase & Co (JPM.N) said on Monday it has applied to China's securities regulator to set up a securities business in which the U.S. bank would own a majority stake under recently relaxed ownership rules.
The unit, in which JPMorgan would own 51 percent, would allow the firm's corporate and investment banking divisions to seek more Chinese clients on the mainland in an effort to expand and grow their businesses, JPMorgan said in a statement.
The U.S. bank also said it is looking to double its research coverage of China-listed companies across all sectors, and that it has appointed banking veteran Mark Leung as chief executive of its China business.
The application is a step toward JPMorgan's return to the securities business in China, having sold its 33 percent holding in a similar venture to its local partner in 2016.
JPMorgan did not disclose who would own the remaining 49 percent of the new venture. However, it said it would raise its ownership to 100 percent if eventually permitted.
China in April said it aims to raise foreign ownership limits in securities, fund management and futures firms to 51 percent. The announcement came as the United States and other trading partners complain of unfair limits on competition.
"These developments are important for China, the U.S. and global commerce, and an encouraging sign for the world's two largest economies," JPMorgan Chief Executive Jamie Dimon said in the statement.
In the past, Western banks could only own up to 49 percent of Chinese securities joint ventures. The lack of control and limited contribution to revenue have long been a source of frustration.
JPMorgan joins other foreign banks including Nomura Holdings Inc <8604.T> and UBS Group AG (UBSG.S) who have taken steps in China to set up majority-owned securities businesses, which typically provide broking and underwriting services.
So far, only HSBC Holdings PLC (HSBA.L) has received permission to set up a majority-owned securities joint venture in China, taking advantage of rules that favor Hong Kong-established banks over foreign peers.
JPMorgan also said its asset and wealth management unit is also working on increasing its current Chinese joint venture stake to a majority interest, subject to agreement with its joint venture partner and the relevant authorities.
(Reporting by Sumeet Chatterjee; Editing by Himani Sarkar and Christopher Cushing)