Citigroup in China has obtained a licence from the China Securities Regulatory Commission (CSRC) to provide domestic fund custody services, the first US bank to do so and the latest financial firm making the move to expand its presence in Mainland China.

The licence allows Citi to safekeep and service securities for China-domiciled mutual funds and private funds – a $2.3 trillion retail investor market – subject to passing an onsite inspection by CSRC which is due to be completed later in the year.

"Citi's China domestic fund custody licence is great news for our global clients," commented David Russell, Citi's Asia Pacific head of securities services. "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."

Many leading asset managers are building a stronger presence in Mainland China, after the removal of foreign ownership restrictions earlier this year which allow them to take a majority stake in joint ventures and to establish their own subsidiaries, along with rules being eased for the mutual funds sector. Among the firms taking advantage of this new landscape are BlackRock, Goldman Sachs, HSBC, JPMorgan and Morgan Stanley, along with Vanguard which is shifting its Asia HQ to Shanghai while closing its Hong Kong and Japan units.

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Citigroup in China has obtained a licence from the China Securities Regulatory Commission (CSRC) to provide domestic fund custody services, the first US bank to do so and the latest financial firm making the move to expand its presence in Mainland China.

The licence allows Citi to safekeep and service securities for China-domiciled mutual funds and private funds – a $2.3 trillion retail investor market – subject to passing an onsite inspection by CSRC which is due to be completed later in the year.

"Citi's China domestic fund custody licence is great news for our global clients," commented David Russell, Citi's Asia Pacific head of securities services. "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."

Many leading asset managers are building a stronger presence in Mainland China, after the removal of foreign ownership restrictions earlier this year which allow them to take a majority stake in joint ventures and to establish their own subsidiaries, along with rules being eased for the mutual funds sector. Among the firms taking advantage of this new landscape are BlackRock, Goldman Sachs, HSBC, JPMorgan and Morgan Stanley, along with Vanguard which is shifting its Asia HQ to Shanghai while closing its Hong Kong and Japan units.