By Chao Deng

BEIJING-- Goldman Sachs Group Inc. has applied with Chinese regulators to take a majority stake in an investment-banking joint venture, the most recent move by a foreign company to tap the nation's vast financial sector.

The company has filed paperwork to increase its stake in Goldman Sachs Gao Hua Securities Co. to 51% from 33%, with the goal of taking over the local operation completely, a spokesman said.

Beijing is opening up its financial sector and has given permission to handful of foreign companies to own majority stakes in mainland banking, securities and insurance sectors. Before 2017, Western companies could operate in China only as a minority partner in a securities joint venture with a local company.

Expanding in China has come slower than many foreign companies hoped, in large part due to regulators' restrictions. JPMorgan Chase & Co. and UBS Group AG are among the companies that have been allowed majority stakes. Goldman had waited to apply to figure out a way to meet the Chinese securities regulator's requirement that majority owners have at least 100 billion yuan ($14.2 billion?) in net assets.

Goldman spokesman Edward Naylor declined to disclose details on how they figured out how to meet the requirement but said the company decided to meet the net-assets requirement instead of trying to convince regulators to overlook it. Industry executives and analysts had lodged complaints that the threshold is unnecessarily high, meaning only a handful of foreign securities firms operating in the China market could meet it.

In recent months, China sped up its timeline for opening up the financial sector. It will let foreigners freely invest in futures, securities and life insurance in 2020, one year ahead of Beijing's previous schedule.

China is opening the sector while it is locked in a trade war with the U.S. and faces downward pressure on its economy.

Mr. Naylor said that Chinese businessman Fang Fenglei and Legend Holdings, the two largest shareholders in Beijing Gao Hua Securities Co. are expected to decrease their stakes. "The endgame for us has always been 100%" ownership, he said.

Write to Chao Deng at Chao.Deng@wsj.com

(END) Dow Jones Newswires

August 21, 2019 04:48 ET (08:48 GMT)

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