Citigroup has reportedly secured regulatory approval for fund custody business in China as the country accelerates the lifting of restrictions on its capital markets despite rising Sino-US tensions.

Citigroup’s Chinese unit obtained approval from the China Securities Regulatory Commission (CSRC) for the onshore fund custody business in the country, Reuters reported.

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The approval makes the American banking group the first major global custodian to set up an onshore fund business. It would allow the firm to tap into the $19 trillion asset management market in the country.

Citi APAC securities services head David Russell said: “We look forward to servicing global asset managers as they establish onshore China business and to work with domestic asset managers as they grow their businesses onshore and globally.”

The bank, which has been providing cross-border securities services in China for more than two decades, is planning to expand its investment banking business in the country.

According to Citi China CEO Christine Lam, the bank plans to bring its best practices to the Chinese market, leveraging its strengths in cross-border services.

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Last October, Bloomberg reported that Citigroup is looking to set up an investment banking unit in China.

The report also said that the bank’s executives in Asia were negotiating with New York executives to set up a China securities business.

In September last year, Citi also received domestic fund custody licence from the CSRC to hold securities on behalf of mutual funds and private funds in the country.

In December last year, the Chinese unit of German banking group Deutsche Bank obtained a domestic fund custody licence.