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Chinese regulators grants domestic fund custody licence to Citigroup

Standard Chartered was the first bank to obtain a domestic fund custody license in 2018

Chinese regulators have granted a domestic fund custody licence to Citigroup headquartered in New York, media reports said. The move marks Citigroup as the first American company to receive such license in 2020 after China’s regulators changed the rules this year to broaden the mutual funds space.

David Russell, Citi’s Asia-Pacific head of securities services, told the media, “Citi’s China domestic fund custody license is great news for our global clients. 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.”

The rules and regulation by the country’s security, insurance and banking regulatory commissions this year has allowed local branches of foreign banks to bid for fund custody licence for the first time in China. Furthermore, Citigroup with the licence can provide custody-related services to both mutual funds and private funds.

South Africa’s Standard Chartered is the first bank to obtain a domestic fund custody license in 2018 in China. The bank obtained the licenced when the Chinese government allowed local subsidiaries to apply for such licences.

Global insurance companies and banks are eager to take control over their joint venture in China this year after the Chinese government changed foreign ownership rules for fintech firms, which now allows them to resume business.

Banks amid the Covid-19 pandemic have struggled to recover losses are mired in bad loan repayments

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