Bank of China QFII Custodian Business Sees Solid Development

On March 16, it was learned from Bank of China (BOC) that, given continuous reforms in the securities market, the custodian business gained increasing attentions of banks. BOC seized the opportunity to expand the custodian business as a key product of the intermediate business, and actively developed new business and products. Its own business has also seen remarkable growth in addition to more custodian services and products available for customers.

Since it become one of the first securities investment fund custodian banks in 1998, BOC custodian business has achieved continuous, rapid and healthy development. BOC won the bid in 2002 for the custodian of the National Social Security Fund, and became the sole custodian of the insurance funds of PICC Property and Casualty CO.

, Ltd. in 2003. In recent years, to improve the overall custodian business structure and respond to the State s determination of attracting overseas institutional investors and developing the securities market, BOC actively tapped into the QFII custodian business as a key point. BOC has quickly become a market leader leveraging on its global network, rich experiences in custodian business and outstanding custodian strengths.

Up to now, the number of QFII approved by the CSRC and designating BOC as the custodian ranks 2nd in all the QFII custodians and 1st in the Chinese-funded custodian banks.

Under the philosophy of providing excellent services for the investor and aggressive supports for China s capital market reform, in order to improve the QFII custodian business, BOC inputs massive resources into team construction, system development and service quality improvement, and have made considerable achievements.

Since late 1990s, BOC has been training its employees for QFII professionals to prepare for introduction of the QFII business. Through many years efforts, a specialized team with rich experiences in customer services, solid business background and excellent communication ability in foreign languages has been developed.

Now, BOC is able to provide customers with one-stop services ranging from application for support and account opening to daily custody. A specialized team is the basis for quality services, while advanced hardware is the carrier of quality services. BOC has developed and continuously improved its custodian backstage processing, customer service systems, etc.

, and has persistently adapted itself to market changes, product update and customer demand. All the indicators of the business system take the leads in the sector. Apart from support of sound hardware system and specialized steam, BOC also designates a customer manager for each QFII customer to solve all the problems, so as to provide value-added custodian services tailored for individual customers in addition to basic custodian services.

As China s capital market develops and opens further, more overseas investors would come to the domestic market, and many domestic qualified investors would enter the international market. BOC is confident to seize the market opportunity to aggressively develop the investor service products including QFII custody and to promote its own business capacity while realizing the value for investors, so as to support and fuel the reform and opening up of China s capital market.

Background Information

The QFII refers to the Qualified Foreign Institutional Investor. The approved QFII is permitted to remit in exchange capitals in a certain amount under specified rules and restraints, convert them into local currency, invest in the local securities market in the special account under strict regulation, and convert the profits and dividends into foreign exchange capitals and remit abroad upon approval.

Since the 1990s, some emerging market countries and regions opened up their securities market via QFII model in a controlled way. Experiences show that implementing the QFII system has obvious positive effects on increasing capital supplies for the domestic market, improving the structure of investors, guiding rational investment in the market, improving the corporate governance structure of listed companies, promoting local industrial development and accelerating progress of internationalization of emerging markets.