The Sumitomo Trust and Banking Company has named Citi securities and fund services, a division of global transaction services, as custodian bank in China.
Under the agreement, Citi securities and fund services will act as custodian for Sumitomo Trust’s qualified foreign institutional investor (QFII) program and provide relationship management, implementation and customer service support in both China and Japan.
The Sumitomo Trust recently became the first Japanese bank to acquire the license of QFII from the China Securities Regulatory Commission.
QFII is a system that grants the license to invest in Chinas securities markets to the foreign financial institutions that fulfill certain conditions such as investment experience, investment structure and assets under management. Banks, securities companies, mutual fund companies and insurance companies and other investment companies are allowed to apply for the QFII license and 85 institutions have been granted in the world as of June 30, 2009.
In winning this mandate, Citi will provide Sumitomo Trust with an array of custody services including settlement and safekeeping of assets, corporate action processing, income collection, recordkeeping and consolidated reporting.
Akira Inoue, senior manager of global product management office at The Sumitomo Trust and Banking Company, said: “As the first Japanese bank to receive an approved QFII license, the appointment of an experienced and innovative custodian bank was a key priority for us. Through partnership and mutual understanding, we are extremely confident that Citi is the right choice for our QFII program.”