Bank appoints global custodian
Agricultural Bank of China, the only unlisted lender among the mainland's Big Four state-owned commercial banks, has appointed ABN Amro-Mellon as the global custodian for its offshore investments and for QDII products still being developed.
ABN Amro-Mellon, a joint venture between Dutch bank ABN Amro and US-based Mellon Financial, will provide global custody and securities lending services for Agricultural Bank's international assets.
The venture will also handle overseas accounting and investment mandates under the mainland's Qualified Domestic Institutional Investor scheme, ABN Amro-Mellon said yesterday.
Agricultural Bank received approval in December from the country's banking regulator to invest clients' money overseas under the QDII scheme. The bank said last month it was dealing with all the required issues including finding custodians for its QDII products.
According to the QDII scheme guidelines, mainland lenders or other institutions developing QDII products should pick one domestic bank as a master custodian and one overseas bank as a sub-custodian. The latter should be chosen by the domestic master custodian bank.
The sub-custodian is paid by the master custodian with part of the fees it receives from clients for its services.
'Agricultural Bank is its own master custodian for its QDII product,' said William Mak, general manager for Asia at ABN Amro-Mellon. '[It] then chose ABN Amro Mellon as the sub-custodian bank.'
ABN Amro-Mellon's derives its fee from the master custodian, Agricultural Bank. 'ABN Amro-Mellon also acts as a custodian for Agricultural Bank's own overseas investments,' said Mr Mak.
QDII business could help Agricultural Bank improve its use of capital and enhance its intermediary businesses, the China Securities Journal reported last month, citing an unnamed source from the bank.