First foreign bank to implement domestic mutual fund custody, WFOE private fund custody
Standard Chartered Bank (China) successfully entered into a mutual fund safekeeping deal in June and a wholly foreign-owned enterprise (WFOE) private fund custody deal in January 2021, making it the first foreign bank to enter into transactions in these two targeted segments.
China’s $ 3 trillion mutual fund market has long been a key segment with high priority for the national conservation industry, subject to local regulations and the highest quality standards, and dominated by the few large local banks. . The opening up of the market to international custodians has since created more options for domestic mutual and private funds.
With their roots overseas, WFOE fund managers are often seen as another business objective for foreign banks that have received or apply for a local fund custody license, as these WFOEs can leverage the extended operating model of the international depository to facilitate set-up and navigation in China.
“With increasing capital flows between China and other international markets, the successful execution of these transactions demonstrates once again the strength of our differentiated proposition – a proposition that combines the bank’s global network with our long-standing local conservation experience to help our clients grow their businesses. proposal to China, ”says Margaret Harwood-Jones, Co-Head of Financing and Securities Services, Standard Chartered. “We look forward to deepening our role as a connecting bank for global institutions seeking to enter the Chinese market. “
After establishing its custody business in China in 1992, Standard Chartered has to date built a significant presence in both inbound (QFII / CIBM) and outbound (QDII) investment programs, and has deposited products from approximately 25 local brokers and fund managers. In 2018, it became the first foreign bank in China to obtain the license to hold domestic funds.