Citigroup and its Chinese partner have won regulatory approval to set up a securities joint venture to tap China's rising capital markets, a Shanghai financial official said yesterday.

This is a key step for the United States bank to enter into the world's biggest initial public offering market and follows a joint venture agreement signed with Orient Securities Co in June 2011.

The China Securities Regulatory Commission approval for the deal was announced by Fang Xinghai, director of the Shanghai Financial Services Office, at a briefing yesterday.

According to details announced, Citigroup will own 33 percent of the new venture, in line with regulations, while its Chinese partner takes the remaining 67 percent.

Orient Securities, established in 1998 in Shanghai, has more than 3,100 employees and is owned by a number of Shanghai's state-owned companies.

Citigroup, the first American bank to enter the Chinese market, established its first branch in 1902 in the country and today its network spans 13 cities.

Citibank (China), the Chinese mainland subsidiary of Citigroup, declined to comment yesterday.

Also yesterday, Fang said Shanghai Pudong Development Bank and Silicon Valley Bank had gained regulatory approval for a joint venture to start offering financial services to high-tech companies in June.

It marks Silicon Valley Bank's latest expansion in China.

Shanghai launched the Qualified Foreign Limited Partner program last year to allow foreign investors to convert US dollars to yuan for private equity investment in China.

Shanghai has granted QFLP licenses to 14 private equity firms last year.