HONG KONG (Reuters) - Standard Chartered Bank (China) has become the first foreign bank to be granted a licence to provide custody services to domestic funds and asset managers in China, the bank said on Monday, as Beijing took another step towards opening its capital markets.
Since 2017, a handful of foreign asset managers have been permitted to set up onshore operations and sell investment products in China, but custody, holding clients’ securities for safekeeping, has, until now, been restricted to local players.gi
This new licence, granted by the China Securities Regulatory Commission, will allow StanChart <STAN.L> <2888.HK> to provide custody services to these foreign asset managers operating in China, as well as domestic players.
“This is a big step forward in the further opening up of China’s domestic financial markets," said Jerry Zhang, chief executive and executive vice-chairwoman of Standard Chartered China, in a statement.
China's equity and bond markets, at nearly $20 trillion, are the third largest in the world, according to the statement. Chinese authorities are cautiously opening these markets to foreign asset managers.
Last year, Fidelity became the first global asset manager allowed to launch investment products through a wholly-owned local subsidiary, and others, such as Man Group <EMG.L> and Aberdeen Standard Investments have since followed suit.
Commercial pensions are one area which global asset managers are particularly keen to tap, as Chinese authorities role out proposed reforms and pilot programmes with the aim of building a commercial private pension market in China.
(Reporting by Alun John; Editing by Simon Cameron-Moore)