Chinese non-bank entities to offer custody services

New rule affecting Chinese non-bank financial intermediaries takes effect June 1.

The China Securities Regulatory Commission, the banking sector regulator, last week announced it will allow non-banking financial institutions to offer custody services for securities investment funds.

Chinese non-bank financial intermediaries whose net assets over US$319 million at the end of each fiscal year for the last three years can apply to CSRC for the license.

CSRC requires applicants to have an independent fund custody department with a well-designed security monitoring system and a business operating system. It believes the new regulations will promote market competition in the fund custody sector.

CSRC also said a set of rules to regulate Chinese securities companies in asset securitization and the operation of affiliated agencies.