US banking giant Citigroup granted custody licence in China as mainland fund sector further opens up
- Citi becomes first American bank to receive domestic fund custody licence following new rules adopted this year
- Foreign lenders, asset managers are seeking to tap into growing income of Chinese middle class
Chinese regulators have granted a domestic fund custody licence to Citigroup, making it the first American bank to receive one after mainland regulators tweaked the rules this year to further open up the country’s mutual funds sector.
Rule changes by the China Securities Regulatory Commission and the China Banking and Insurance Regulatory Commission this year allowed local branches of foreign banks to apply for fund custody licences for the first time.
This licence granted by the CSRC lets Citibank (China) provide custody-related services to both mutual funds and private funds domiciled in China after passing an on-site inspection later this year.
“Citi’s China domestic fund custody licence is great news for our global clients,” David Russell, Citi’s Asia-Pacific head of securities services, said in a statement. “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.”
