What’s new: A China subsidiary of U.S. banking giant Citibank NA has been granted a domestic fund custody license, China’s securities regulator said (link in Chinese) last week, as part of the country’s efforts to further open up its financial sector.
Citibank (China) Co. Ltd. is the first American bank to receive the license, seeking to expand into the Chinese market despite growing Sino-U.S. tensions.
The license allows it to provide custody services for fund products issued by fund firms or other asset managers in China, namely holding the fund assets for safekeeping.
What’s the background: In January, China promised in the phase one trade deal with the U.S. to “allow branches of U.S. financial institutions to provide securities investment fund custody services” within five months, in a bid to widen market access for foreign investors.
Previously, among more than 50 fund custodians in China, Standard Chartered Bank (China) Ltd. from the U.K. was the only foreign company to have obtained (link in Chinese) the license.
Besides Citibank, HSBC Bank (China) Co. Ltd. and Deutsche Bank (China) Co. Ltd. have also applied for fund custody licenses in China this year.
Related: Rule Change to Fund Custody Licenses Helps China Meet U.S. Trade Deal Commitment
Contact editor Marcus Ryder (marcusrdyer@caixin.com)
