China’s capital market has further opened up to the outside world with new policy measures.

On May 9, in accordance with the unified arrangement of the national financial industry opening to the outside world, the first phase of the Sino-US economic and trade agreement was implemented to support foreign banks to apply for securities investment fund custody in China Business qualification (referred to as “fund custody qualification”), China Securities Regulatory Commission publicly solicited opinions on the revision of the “Administrative Measures for Securities Investment Fund Custody Business” (referred to as “Custody Measures”).

“The financial industry has taken another solid step towards opening up to foreign capital! At present, it is very obvious that fund custody is monopolized by head institutions. It is believed that with the participation of more foreign-funded institutions, some changes in the market structure may occur. “A brokerage analyst said.

However, some fund industry believes that the revised form of the” custodian approach “is greater than the actual meaning,” custodian is a relatively mature Services, service differentiation is very small, domestic custody business development still has to be linked to the scale of agency sales! Without the scale of consignment, there is no customer even if the hosting fee is discounted. ”

Fund custody refers to commercial banks or other financial institutions established according to law and qualified for fund custody acting as the custodian, in accordance with the provisions of laws and regulations and the provisions of the fund contract , For the fund to perform safe custodianship of fund assets, handle liquidation and settlement, review and review of net asset value, conduct investment supervision, and convene fund shareholder meetings, etc. Commercial banks and other financial institutions engaged in fund custody business should be approved by the China Securities Regulatory Commission Approved and obtained the fund custody qualification according to law.

According to the list of custodians of securities investment funds announced by the China Securities Regulatory Commission on April 13, 2020 (March 2020), currently obtained There are a total of 45 custodians of fund custody qualifications: including 27 commercial banks, 16 brokers, China Securities Finance Corporation (“Zhengjin Company”) and China International Capital Corporation (“CICC”) ).


The revision involves 4 aspects

According to the “Custody Measures”, this revision mainly involves 4 aspects:

First, support foreign bank branches to apply for fund custody qualifications, give due consideration to the asset scale and business experience of foreign bank head offices, clarify branch application conditions, and further improve access arrangements for net assets.

Among them, the requirements for commercial banks and other financial institutions that apply for fund custody qualifications include: net assets of not less than 20 billion yuan, a dedicated fund custody department, and a fund custody department The senior management personnel to be appointed meet the statutory requirements, and the number of employees who have obtained the qualification for fund practice is not less than 1/2 of the number of employees in the department; there are many practitioners who intend to engage in fund liquidation, accounting, investment supervision, information disclosure, internal audit monitoring and other businesses It has 8 employees and has the qualifications for fund practice.

It is worth noting that the current rules require that the net asset should not be less than 20 billion yuan. Fund custody applicants have a net asset of not less than RMB 2 billion at the end of the last three fiscal years. At the same time, in order to undertake fund settlement duties, according to the settlement rules, commercial banks must also meet the net assets at the end of the most recent three fiscal years. 40 billion yuan and other conditions.

However, the SFC believes that there are certain problems with the above standards: On the one hand, the Qualified institutions usually need to obtain settlement qualifications at the same time to meet the requirements of the complete business chain of fund custody. Therefore, 40 billion yuan has become the de facto benchmark of the fund custodian. On the other hand, the current “custodian approach” provisions are seriously behind. According to mature market experience, fund custodians usually require strong capital strength. When formulating the “Administrative Measures for Securities Investment Fund Custody Qualifications” in 2004, the net asset requirement of 2 billion yuan was clarified to ensure that fund custodians can effectively perform assurance Obligations. Now, the relevant standards are significantly lower, which can no longer effectively guarantee the applicant ’s asset quality and anti-risk ability. Therefore, after overall consideration, it is planned to adjust the fund custodian ’s net asset access arrangement to reach 20 billion yuan. In order to effectively improve the fund’s custodian’s ability to resist risks.

In addition, the other three aspects involved in this revision include:

Second, improve the fund custodian’s supervision arrangements, establish a foreign bank head office accountability mechanism, and clarify the cross-border deployment of information systems and cross-border data flow Relevant requirements; continue to strengthen risk management, strengthen post-event supervision, and enrich administrative supervision measures.

Third, continue to promote simplified administration and decentralization, allowing applicants to obtain approval before Carry out preparatory work on personnel, systems, places, etc., optimize application materials and on-site inspection arrangements.

Four, unify the access standards and supervision of commercial banks and other financial institutions Requirements, including the requirements for non-bank financial institutions to carry out fund custody businesslaw”.


Fund custody fees accounted for more than half of total market revenue in 2019 by the four major banks

In recent years, as the scale of public fund management continues to rise, fund custody The income realized by the institution is also increasing year by year.

On February 24, 1998, ICBC became China ’s first fund custodian bank. According to data released by the China Banking Association, as of the end of 2018, the scale of custody of China’s banking industry assets reached 145.76 trillion yuan, an increase of 3.01% from 2017, the depository ratio reached 79.86%, and the custody factor reached 55.76%. In addition, in 2015, 2016, and 2017, the industry-wide custody fee income was 44.886 billion yuan, 51.062 billion yuan, and 54.514 billion yuan, an increase of 21.14%, 13.76%, and 6.76%, respectively.

Tianfeng Securities pointed out that early custody products were dominated by securities investment funds and bank wealth management. With the rapid development of the capital market, the proportion of other custody products gradually increased. In 2012, securities investment funds and bank wealth management accounted for 13% and 27%, respectively. At the end of 2017, the two fell to 7.97% and 21%. At the end of 2017, securities asset management products accounted for 13.06%, only lower than bank wealth management and trust.

“Asset custody business mainly relies on custody fees and income from providing value-added services, and the custody rates of different financial products vary greatly. Different, mainly determined by the scale and the services that need to be provided. “Tianfeng Securities said that from the perspective of income composition, the fund contributed the most. In 2017, the fund custody income accounted for 20.75%.

According to the fund company ’s annual report, the custody fee income of the full-market fund custodians has also increased substantially year by year.

According to the statistics of Tianxiang Investment Consulting, in the 2019 custody fee, the 5,797 funds included in the statistics have drawn 14.434 billion yuan, an increase of 4.37% compared with 2018 . It is worth noting that the custody fee is still the “territory” of large banks. The four major banks of workers, peasants, and construction companies charge a total of 7.585 billion yuan, and the market accounted for more than half, about 52%.

ICBC (601398) and China Construction Bank (601939) 2019 Fund Custody FeeBoth revenues exceeded the 2 billion yuan mark, reaching 2.88 billion yuan and 2.488 billion yuan respectively, accounting for a third of the fund’s custody income.

It is worth noting that Bank of China (601988) replaced China CITIC Bank (601998) in third place, and the income from custody fees reached 1.476 billion yuan in 2019. CITIC Bank, which is in custody of Yuebao, still maintains high custody fee income, reaching 1.332 billion yuan in 2019. In addition, the Bank of Communications (601328) and Agricultural Bank (601288) in 2019 also received more than 1 billion yuan in custody fees.

At the same time, China Merchants Bank (600036) and Industrial Bank (601166) will strengthen their business in 2019 and continue to impact the inherent pattern of the fund custody market. The data shows that China Merchants Bank custody 466 funds last year, an increase of 21.67% year-on-year (compared to the same period last year); the bank ’s fund custody expenses reached 889 million yuan, an increase of 8.53% year-on-year; Industrial Bank custody of 268 funds last year , An increase of 14.53% year-on-year; the bank ’s fund custody expenses reached 816 million yuan, an increase of 21.09% year-on-year.


Three foreign banks applied for fund custody qualification in April

Industry sources pointed out that the bank ’s custody capacity reflects the bank ’s fund consignment strength , Bank channels are still the mainstream of domestic fund sales. On the one hand, due to the wide network coverage, state-owned banks are the absolute overlords of fund sales and custody; on the other hand, some banking institutions have taken advantage of their characteristics and actively pursued the head institutions.

The above persons further analyzed that from the perspective of the overall custody bank pattern, the “head effect” is obvious. Some small and medium-sized securities firms and some banks have custody fee income in 2019 The year saw a decline.

However, the monopoly structure of the fund custody business ’s head institution has not affected the enthusiasm of foreign institutions trying to divide up this piece of cake.

According to the information on the official website of the SFC, in April this year, a total of three foreign banks Deutsche Bank, Citibank and HSBC applied for fund custodian qualification materials were accepted by the SFC .

In June 2018, Standard Chartered Bank ’s “Commercial Bank Application for Fund Custodian Qualification Approval” appeared on the SFC website. In October of the same year,Standard Chartered officially obtained the fund custody qualification and became the first domestic approved fund custodian to be the only approved foreign bank.

Some bankers said that the current custody fee rate of domestic banks for public funds is about 0.1% -0.2%; this part of the revenue accounts for the proportion of the bank ’s overall revenue Not high, about 0.6%. “We believe that even if foreign banks can do fund custody business, the impact will be relatively small, because we have cooperated with public funds for more than 20 years. We have deep business cooperation with mainstream fund companies on the market, and this This kind of cooperation is not just a custody business. Many places are already full-scale cooperation between fund companies and banks. “

Some market analysts also pointed out that custody business belongs to banks. In the mid-income business, charging service fees such as account management, in the context of interest rate liberalization, it can broaden the bank ’s source of income without consuming any capital or bring additional risks to the bank, which is beneficial to optimize the business structure and expand business space of. Secondly, although its direct income is not much, the business transactions it brings can expand the cooperation with the fund in other businesses, such as investment and loan linkage, etc., to increase the platform foundation for cooperation.

“Another point is that in certain fund custody areas, foreign banks have an advantage. The capital market is expanding and the bond market and stock market are vigorously attracting foreign investors. In particular, institutional investors, such as QFII, will have more and more such funds in the future. For these investors, these foreign banks may have been their service banks before. Therefore, foreign banks are serving market segments such as foreign fund investors. There are advantages. “The above analysts said,” Overall, they are more optimistic about their development. “