A Chinese unit of Citi has received domestic fund custody licence from the China Securities Regulatory Commission.
This makes Citi the first US bank to secure this custody licence in China. The licence will allow the bank to hold securities on behalf of mutual funds and private funds in the country.
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Citi can hold securities after passing an onsite inspection. It will offer custodian services such as record-keeping, trade settlement and income processing.
Citi APAC head of Securities Services David Russell said: “As international fund managers, securities firms, and insurance companies set up in China, we believe they will want a trusted service provider to help them mitigate risks and reduce costs.”
The bank’s entry into the Chinese market follows multiple US financial services companies that seek to expand into Chinese fund management.
Last week, Vanguard, one of the largest investment managers, announced plans to transfer its regional headquarters from Hong Kong to Shanghai, China.
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By GlobalDataThe company has decided to close its operations in Hong Kong and Japan.
Also, US-based asset management firm BlackRock received the China Securities Regulatory Commission approval to launch a mutual fund arm.
The approval enables the firm to set up a wholly-owned subsidiary in Shanghai. The watchdog has given BlackRock six months to establish the new unit.
UK-based Standard Chartered became the first international bank to secure the China domestic fund custody licence in late 2018.
