NEW YORK • Morgan Stanley, Goldman Sachs and Citigroup are finding that patience pays off in China.
The trio now have an advantage over some of their largest Wall Street rivals after officials in charge of the world's No. 2 economy promised last Friday to let foreigners take majority stakes in securities firms there - raising limits that had long frustrated US and European bankers.
JPMorgan Chase pulled out of a joint venture in China last year. Bank of America also does not have one.
In contrast, Morgan Stanley raised its stake in a partnership with Huaxin Securities to 49 per cent earlier this year - the limit at that time - from about 33 per cent, according to a person with knowledge of the deal.
Goldman Sachs and Citigroup also have stuck with their ventures, in which they each hold 33 per cent.
Big Wall Street firms have long hoped to expand in China's relatively young but burgeoning securities industry, only to find their ambitions thwarted by an inability to run operations as they saw fit.
Giving global firms more access would benefit the local market, said Mr Jordi Visser, chief investment officer at Weiss Multi-Strategy Advisers, a hedge fund in New York.
"There is still a need for expertise and product development within the financial sector," he said. "This decision will help accelerate that."
European firms also have ventures in China, and aspirations for expanding them.
UBS Group, Switzerland's largest bank, said last Friday that the Chinese government's decision "represents an important step in further opening up China's financial sector". It plans to work on increasing its stake in UBS Securities.
China had raised the cap on foreign ownership of joint ventures before, increasing it in 2012 to 49 per cent from 33 per cent - still just shy of a majority.
Regulators said they now plan to set the limit at 51 per cent and will scrap that altogether three years after it takes effect.
The government said it is also removing limits on foreign ownership in banks.
Morgan Stanley acknowledged it has ambitions for the venture it kept. "Morgan Stanley is committed to growing our businesses in China," it said last Friday.
"We see this policy change as an important step in the further development and opening-up of China's capital markets."