Citi becomes first US bank to win custody prize in China

Wall Street bank receives licence at a time of rapid growth in mainland funds market

Citi’s entry into the market comes despite rising tensions between Beijing and Washington

Citigroup has become the first US bank to receive a fund custody licence in China, allowing it to provide a core service to global asset managers as they rush to participate in the opening up of the country’s financial sector.

The New York-based bank said on Wednesday that the licence — which allows it act as a custodian bank and hold securities on behalf of mutual and private funds in China — had been approved by the China Securities Regulatory Commission.

Christine Lam, president and chief executive officer of Citi China, said the bank was “proud” to be granted the first custody licence in China among American rivals, adding there were “tremendous opportunities for global players to participate” in reforms.

Citi’s entry into the market comes despite rising tensions between Beijing and Washington, and follows a recent wave of US financial services companies seeking to expand into Chinese fund management after the government relaxed restrictions. Citi will be able to provide custodian services such as record-keeping, trade settlement and income processing.

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Article by Thomas Hale for the Financial Times

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