CSRC Grants Citigroup Fund Custody Licence in China

​Standard Chartered is the only other foreign bank to have obtained a fund custody licence in China. Citi becomes the first US bank to do so. 

The CSRC (China Securities Regulatory Commission) has granted a domestic fund custody licence to a Citigroup subsidiary in China.

With the approval, Citibank (China) Co Ltd becomes the first US bank to receive such a licence, as the US bank seeks to expand into the Chinese market despite ongoing tensions between the two countries.

The CSRC and CBIRC (China Banking and Insurance Regulatory Commission) finalised rules for granting foreign financial institutions access to domestic fund custody business through their local branches in July. The rules proposed in a May consultation as part of China’s commitment under the January trade deal with the US.

Citibank’s licence will allow it to provide custody services for fund products issued by fund firms or other asset managers in China, i.e holding the fund assets for safekeeping, in addition to other custodian services such as record-keeping, trade settlement and income processing.

Citi has six months to establish the fund custody business.

Until now, among more than 50 fund custodians in China, Standard Chartered Bank has been the only foreign bank to obtain a fund custody licence in China.

HSBC and Deutsche Bank are also said to have applied for licence this year.

Additional reporting from Caixin, Financial Times.