The year 2020 was tough for the custodian industry, and those with the most resilience outperformed their peers in this challenging environment. For the custodian banks servicing investors accessing China, in particular, last year proved a crucial period. The banks leveraged technology and lobbied regulators to push forward the digitalization journey so that they were able to assist the clients to capture opportunities timely despite the pandemic situation.

Meanwhile, Chinese regulators pursued efforts to open up the market by simplifying rules or relaxing restrictions on the China access channels such as the qualified foreign investors (QFI) scheme and Bond Connect.

The QFI is one of the areas that had the most significant development last year. The regulators merged two parallel programmes, namely the qualified foreign institutional investors (QFII) and the renminbi QFII (RQFII), in November 2020, forming the new QFI scheme, which provides a more simplified market access process. This marks another major step in China’s efforts to open up the market to foreign capital following the removal of quotas for QFII and RQFII in May.

As a result, in 2020, the number of foreign investors that got approved under QFI tripled compared to the previous year, indicating a strong demand for accessing the Chinese market. There are 19 banks, including both local Chinese and global institutions, providing custodian services in this space, according to data from the China Securities Regulatory Commission (CSRC).

With the market developments last year, major players such as HSBC, Standard Chartered, ICBC, and Bank of China recorded notable business expansion. Despite its large base HSBC continues to show strong growth in terms of market share and new mandates onboarded, particularly in servicing clients in CIBM Direct, QFI and Stock Connect. Standard Chartered continues to offer comprehensive services through China access channels.

The Asset is also pleased to note that industry players are even more active in providing client feedbacks and participating in the Asset Servicing Survey.

Against this backdrop, The Asset announces the offshore winners for the “Best in Asset Servicing, China” awards of The Asset Triple A Sustainable Investing Awards for Institutional Investor, ETF, and Asset Servicing Providers 2021.

For more details, please subscribe to our magazine.

For the full list of winners, please click here.