HSBC picked as custodian bank in China

HSBC has announced that it has been mandated as a custodian bank for the Industrial and Commercial Bank of China (ICBC).

The deal occurs after ICBC has recently secured approval as a Luxembourg-based Renminbi (RMB) qualified foreign institutional investor (RQFII).

Under the new RQFII programme, which extended to Luxembourg in April 2015 with a quota of RMB50 billion, the aim is to expand China’s domestic capital markets using RMB while HSBC have maintained their 100% success rate in successful quota applications.

HSBC’s head of securities services in China, Sophia Chung spoke of the importance of Luxembourg in the market.

“This development demonstrates the important role that Luxembourg plays in the internationalisation of the RMB as a hub for cross-border RMB business in
the Eurozone.“

“With the uptake of the RQFII programme, we expect institutional investors across Europe to use Luxembourg as a gateway to China and we also expect more Chinese financial institutions to establish a fund domiciled in Luxembourg,”