By Selena Li

HONG KONG (Reuters) - Morgan Stanley is set to increase its stake in its brokerage joint venture in China by 4.06% to 94%, an exchange filing showed on Wednesday, putting it on track to take full ownership of the business.

The U.S. bank will inject 698 million yuan ($110 million) to boost the registered capital of the unit, a venture formed by Morgan Stanley and China Fortune Securities Co in 2011, to 1.71 billion yuan, according to an exchange filing by China Fortune.

The Shanghai-based state-owned company said on Wednesday that it had decided to sit out the capital injection, which effectively allows its ownership to dilute to 5.94% from the previous 10%.

The change requires the approval of the China Securities Regulatory Commission (CSRC) and other government authorities.

Morgan Stanley declined to comment.

The Wall Street bank acquired 39% of the joint venture from China Fortune in July, taking its ownership to 90%. It rebranded the unit as Morgan Stanley Securities China Co Ltd.

Global banks and asset managers have been boosting their stakes in their Chinese joint ventures since China first permitted foreign-majority ownership in some financial businesses in 2019.

Eight international banks have become the majority shareholders of their brokerage joint ventures in China. ($1 = 6.3683 Chinese yuan renminbi)

(Reporting by Selena Li; Editing by Sumeet Chatterjee)