• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to secondary sidebar
  • Skip to footer
  • Subscribe
  • Twitter
  • RSS Feed

Investment News NZ

Investment News provides financial advisers news stories from the financial industry in New Zealand. Subscribe to our free weekly newsletter.

  • Home
  • News
  • Kiwisaver
  • Subscribe
  • About
  • Advertise
  • Contact
You are here: Home / Investment News / Citi first global bank with China custody licence

Citi first global bank with China custody licence

November 9, 2020

Citibank China Co will become the first global bank with a full-service custody operation in China from the new year. This follows its debut as one of only two to go live with securities lending contracts early this month (November 1).

As announced last week, Citi and HSBC both went live with cross-border lending clients for a series of transactions, having gained a specific licence for that earlier. More importantly, Citi gained its onshore custody licence in September and is building its team for a launch early in 2021.

Harry Peng, Citi’s Hong Kong-based managing director and head of markets and securities services for China, said last week that the new licence, including a separate licence for transfer agency (TA), will make it the first for a global custodian bank. The only other foreign bank to as yet obtain an onshore custody licence is regional bank Standard Chartered.

Peng said: “We’re only starting to work on it. As of today, you [foreign companies] can only do cross-border custody, inbound through QFII or outbound through QDII. We’re starting the business next year. We’ve hired about 10 people so far. You have to do that before you get the licence. As the business grows, we’ll recruit more. They have to be put in a segregated area from the existing staff.”

With the TA component of the custody, a separate licence is also required as is the hiring of some trained staff beforehand. Most of the custody clients will be mutual funds, which is the fastest growing part of the Chinese investment management industry. “It’s potentially a very big market for us,” Pend said. “It was worth US$16-17 trillion in 2019. It’s a much bigger and deeper market compared with the QFII business.”

In last week’s statement on the first securities lending transactions, executed on the China ‘A’ shares market in Shanghai, Citi’s Ji Yang, the China head of markets and securities services, said: “We are busy helping a wave of new foreign investors to apply for their QFII qualifications, including more successful applications for qualified hedge funds and private equity funds. Recently we helped a quantitative hedge fund to get its QFII approval, the first of its kind in QFII’s history and another testimony of further China opening-up.”

That relaxion of QFII covers not only securities lending but also margin trading and securities financing, financial and commodity futures, options, private funds. The Chinese authorities have been gradually relaxing foreign investment rules for several years, with the Shanghai market authorities particularly keen to bring in institutional investors and their service providers to help change the investor profile of the Shanghai exchange. The majority of participants are currently individual investors and the exchange has a reputation as a speculator’s market.

Citi opened its first Chinese office, in Shanghai, in 1902, just after the Boxer uprising which ended up costing China the loss of sovereignty over trading ports and significant reparation payments. Interestingly, the US was the only country in what the Chinese refer to as the “Eight Nations invasion” that quelled the uprising which demanded nothing in return from the Chinese. The portion the US received by way of forced reparations went into scholarships for Chinese students to study in the US.

For its part, the colonies of NSW, Victoria and South Australia sent 600 marines to support the British involvement. The NSW contingent was still there on January 1,1901 when Australia became a nation. The then monarch, Queen Victoria, sent each of them a packet of Woodbines and a photo of herself for their celebrations.

 

Greg Bright is publisher of Investor Strategy News (Australia)

Print Friendly, PDF & Email
Twitter0
LinkedIn0
Google+0
Facebook0

Read More » Investment News

Recent articles

  • Passive move activates AMP NZ investment role; double exit at AMP Capital… April 11, 2021
  • … as Ms Fixit comes to the rescue at AMP HQ April 11, 2021
  • Lifetime deadline set for late April April 11, 2021
  • MyFiduciary books first Australian consulting client April 11, 2021
  • Wealth Technologies welcomes aboard two new platform clients April 11, 2021
  • Look inside: why ESG is for managers not just investments April 11, 2021
  • Same time last year: why 2020 was tough for TAA despite record volatility April 11, 2021
  • Veteran exit triggers NZ Super management rejig April 11, 2021
  • Second big quarter in value rotation April 11, 2021
Finished reading? Why not subscribe? To receive a weekly email enter your email address here.

Primary Sidebar

WEEKLY NEWSLETTER

Sign up here to receive our weekly newsletter.
Learn More »

Investment News

  • Passive move activates AMP NZ investment role; double exit at AMP Capital… April 11, 2021
  • … as Ms Fixit comes to the rescue at AMP HQ April 11, 2021
  • Lifetime deadline set for late April April 11, 2021
  • MyFiduciary books first Australian consulting client April 11, 2021
  • Wealth Technologies welcomes aboard two new platform clients April 11, 2021
  • Look inside: why ESG is for managers not just investments April 11, 2021
  • Same time last year: why 2020 was tough for TAA despite record volatility April 11, 2021
  • Veteran exit triggers NZ Super management rejig April 11, 2021
  • Second big quarter in value rotation April 11, 2021
  • Fink conducts cultural purge as BlackRock solidifies growth April 11, 2021

Search by Keyword

Most Recent Investment News

Passive move activates AMP NZ investment role; double exit at AMP Capital…

April 11, 2021

… as Ms Fixit comes to the rescue at AMP HQ

April 11, 2021

Lifetime deadline set for late April

April 11, 2021

MyFiduciary books first Australian consulting client

April 11, 2021

Wealth Technologies welcomes aboard two new platform clients

April 11, 2021

Investment News Archive

Most Popular Articles

  • NZ share-trading splurge could trigger tax alarms… posted on October 5, 2020
  • Westpac NZ flags retail advice sale to Forsyth Barr posted on October 19, 2020
  • Flint set to spark platform competition posted on August 17, 2020
  • The horror year in technicolour: free KiwiSaver 13 report released posted on September 30, 2020
  • Four to the core: Smartshares to expand, rearrange and reprice ETFs posted on June 22, 2020
  • NZ Funds directors back on board posted on April 24, 2016
  • Kitset KiwiSaver scheme set to unwrap in spring posted on April 27, 2020
  • Kiwi Wealth hits the bigger time posted on November 26, 2017

Sponosored Content

Responsible goes retail: why Mint has opened the SRI tin

David-Boyle

Jumping lessons: what all investors can learn from GameStop loss

What do ‘Kiwi’ experts see for 2021?

David-Boyle

On the industry play-list: four chart-topping regulations for 2021

Quick-links to Popular News

  • FAP Compliance
  • Coronavirus
  • New Appointments
  • Financial Markets Authority (FMA)
  • Kiwisaver
  • Climate Change
  • Crypto Currency
  • Blockchain
  • Insurance

Secondary Sidebar

Recent News

  • Passive move activates AMP NZ investment role; double exit at AMP Capital… April 11, 2021
  • … as Ms Fixit comes to the rescue at AMP HQ April 11, 2021
  • Lifetime deadline set for late April April 11, 2021
  • MyFiduciary books first Australian consulting client April 11, 2021
  • Wealth Technologies welcomes aboard two new platform clients April 11, 2021
  • Look inside: why ESG is for managers not just investments April 11, 2021
  • Same time last year: why 2020 was tough for TAA despite record volatility April 11, 2021
  • Veteran exit triggers NZ Super management rejig April 11, 2021
  • Second big quarter in value rotation April 11, 2021
  • Fink conducts cultural purge as BlackRock solidifies growth April 11, 2021

Footer

Copyright ©2020 InvestmentNews.co.nz — All Rights Reserved ·— Terms & Conditions