Morgan Stanley on Friday launched a joint securities venture with China Fortune Securities in Shanghai, the two companies announced in a statement.

This new joint venture comes as foreign investment banks rush to gain a foothold in China's thriving capital market.

The U.S. investment bank has a one-third stake in the venture, the maximum permitted currently by regulators, while China Fortune holds the remaining portion.

The joint venture, headquartered in Shanghai, has a registered capital of 1.02 billion yuan (158 million U.S. dollars) and will engage in stocks and bonds underwriting as well as proprietary trading.

Wang Wenxue, chairman of China Fortune, was appointed as chairman of the joint venture, while Yang Kai, a managing director of Morgan Stanley, was appointed as its chief executive officer.

The securities firm will have a staff of about 100 during the early period, said Sun Wei, Morgan Stanley's chief executive officer in China.

Morgan Stanley earlier had a 34.3-percent stake in China International Capital Corp., a top Chinese investment bank, but it sold the stake last year.

Other foreign banks, including Goldman Sachs, Credit Suisse, UBS, Deutsche Bank and the Royal Bank of Scotland, also have joint securities ventures in China.

Citigroup announced on June 2 that it has reached an agreement with Orient Securities to set up a joint securities venture in China, although it still needs regulatory approval.