SHANGHAI/BEIJING (Reuters) – BlackRock (BLK.N) has become the first global asset manager to win regulatory approval to set up a mutual fund unit in China, as Beijing throws open its 17.7 trillion yuan ($2.58 trillion) sector.

The world’s biggest asset manager by assets got the green light on Aug. 21 to form a wholly-owned subsidiary in Shanghai, the China Securities Regulatory Commission (CSRC) said on its website late on Friday.

The unit would expand BlackRock’s presence in China’s fast-growing asset management market, where it already has a mutual fund venture with Bank of China, and is setting up a wealth management venture with Temasek and China Construction Bank (CCB) (0939.HK).

It also operates a private fund unit in Shanghai.

China opened its giant financial sector to foreign companies this year as part of an interim trade deal with the United States signed in January.

BlackRock and Neuberger Berman applied to set up mutual fund units on April 1, when Beijing scrapped foreign ownership caps in the sector. Fidelity International has also submitted an application, while several other asset managers, including Schroders, are expected to follow suit.

U.S. fund giant Vanguard Group has announced it would close its Hong Kong and Japan operations, while shifting its Asian headquarters to Shanghai.

BlackRock has six months to establish the unit, the regulator said in its statement.

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