Everbright Securities and Prumerica Financial have announced that they have received approval from the China Securities Regulatory Commission (CSRC) to establish a joint venture fund management company in the People's Republic of China (PRC).

Everbright Securities is a member of the China Everbright Group, one of China's leading financial services groups, while Prumerica is the brand name used in China and selected markets outside the United States by Prudential Financial.  Prumerica Financial will invest in the joint venture through its subsidiary, Prudential Investment Management.

The new company, Everbright-Prumerica Fund Management, will be based in Shanghai and have registered capital of RMB100 million. Everbright Securities will initially own 67% of the joint venture and Prumerica Financial will initially own 33%.

Under the terms of the WTO agreement, a foreign entity can initially hold up to 33% of a JV, increasing to 49% at the end of 2004. A provision exists in this JV, subject to mutual agreement, that would allow Prumerica to increase its shareholding in the future.

It is expected that the new company will be operational in early 2004, pending regulatory approval and business registration. By this time it is expected the joint venture will have the staff and infrastructure in place to begin offering products once a second approval from the CSRC has been gained for business commencement.

Both shareholders will be contributing executives to the JV, as well as recruiting from the outside. In addition, the intention is that Prumerica will nominate the CEO and CIO, both positions subject to the approval by the CSRC and the JV board.

Everbright-Prumerica says it will leverage the extensive resources and investment expertise from both parent companies, including marketing and investor education information, to help more consumers in China recognize the benefits of long-term financial planning and investing. The company says the JV will seek to serve a broad range of investors, from retail clients to institutions and high net worth individuals.

"We're pleased and honoured to have received approval from the CSRC to move forward with Prumerica Financial," says Xie Zhichun, president, Everbright Securities. "We believe Prumerica Financial is an excellent partner who can help us provide the Chinese people with the products, services and advice they need to build greater financial security."

Douglas Fergusson, president of Prumerica Financial Asia adds,"Everbright Securities is a very reputable partner and China is an attractive market for Prumerica Financial. Everbright's experienced management team and solid business model complement our extensive investment and asset management capabilities in Asia and around the world.

"We're very excited about the prospects for this joint venture and the historic opportunity it presents to participate in the rapid development of the fund management industry in China."

Everbright Securities has steadily grown its brokerage, investment banking and asset management businesses as China's securities industry has expanded. It is ranked among China's top ten securities companies.

This is Prudential's first JV in Asia, although Prudential Financial has a strategic investment in CJITS in Korea and acquired a majority interest in Prudential Financial Securities Investment Trust Enterprise in Taiwan, as well as insurance, wealth management and asset management operations throughout Asia.