Controls are about to ease on foreign ownership of domestic fund management firms to promote the opening up of the financial sector, the China Securities Regulatory Commission said on Friday.

"We will evaluate the process first and gradually raise the shareholding ratio of foreign capital in domestic fund management companies," said Zhang Xiaojun, a CSRC spokesman. "We hope the move will promote the development of joint ventures."

Earlier this month, the CSRC announced rules establishing a shelf registration system for public mutual fund issues that it said would promote the development of China's fund sector and attract more institutional investors.

The CSRC said it will complete all registration processes for products within 20 days after the required documents are submitted.

Representatives from the European Commission, the Association of the Luxembourg Fund Industry and the French Fund Association have already met with Chinese authorities to discuss the distribution of certain funds into the Chinese mainland, according to the Financial Times.

However, any agreement would have to wait until after a mainland-Hong Kong mutual recognition arrangement is approved. A pilot program is due to begin in October which will, for the first time, allow investors in Hong Kong and the mainland to trade and settle shares listed in both markets via their local exchanges and clearinghouses.

The first joint-venture fund management company in China was set up in 2012. There are 48 fund management companies in the nation, of which 20 each have foreign ownership of 49 percent.

"China is going to step up the development of its funds industry, drawing on the best practices of global players while also strongly supporting its domestic asset managers," said Wu Bowen, a fund manager at Lion Fund Management Co Ltd.

Zhang also said that the agency is exploring "mutual recognition" of mutual funds beyond Hong Kong to overseas markets.

The CSRC is also formulating rules on equity crowd-funding, said Zhang.

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