HSBC and Citigroup have received approval from China’s securities regulator to sell domestic mutual funds in the country, expanding their scope of financial services in the local market.
Both banks will now be able to offer fund products designed by local fund managers to retail, corporate and institutional clients.
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China’s regulator revised rules in 2011 to allow foreign banks to distribute mutual funds in order to increase competition with local banks.
Helen Wong, chief executive of HSBC China, said: "This product offering not only supplements the existing range of wealth management products offered by foreign banks, but also broadens distribution channels for local funds."
HSBC China will initially offer domestic fund products managed by HSBC Jintrust Fund Management Company, a joint venture of HSBC Global Asset Management and Shanxi Trust and Investment Corporation.
The Chinese domestic fund distribution market is currently dominated by local lenders including Bank of China, China Construction Bank and Industrial and Commercial Bank of China.
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By GlobalDataChina’s mutual fund industry has assets totalling CNY3.98 trillion (US$647 billion), managed by 81 fund management companies, according to the Asset Management Association of China.
