Citibank Receives QFII Custodian Licence in China

March 14, 2003 – Citibank announced today it has been granted a Qualified Foreign Institutional Investors (QFIIs) Custodian Licence by the Chinese authorities. The approval from the China Securities Regulatory Commission (CSRC) and State Administration of Foreign Exchange (SAFE) follows approval from the People's Bank of China on January 14th, 2003. Citibank is one of the first banks to be granted a QFII Custodian Licence in China.

Richard Ernesti, Region Head of Citibank Global Securities Services Asia, "Citibank is very pleased to receive approval from PBOC, CSRC and SAFE as a QFII Custodian. This will enable Citibank to provide securities settlement and custody services for foreign investors investing in the China local securities market. Citibank has the front and back office people, systems, operations and services in place in Shanghai and Hong Kong ready to serve QFII clients."

Mr. Ernesti added, "Citibank has worked with clients in preparing QFII documentation and is now submitting QFII application to CSRC on behalf of our clients. Based on the QFII Guidelines announced by CSRC, it is expected that CSRC will take a maximum of 15 working days to approve the QFII licences, after which SAFE will approve the Investment Quota within another 15 working days."

"The QFII scheme further opens up China's local securities markets to foreign investors, and it will attract long term investment from top tier institutional investors such as broker dealers and fund managers into A-shares, government bonds and convertible bonds. We expect more investors will submit their QFIIs applications in the next few months."

Richard Stanley, Citigroup Country Officer, China said, "The QFII measures mark another significant step in the opening of the Chinese markets to increased foreign participation. We believe we have the knowledge and expertise to provide more diversified and superior services to our clients."

As a QFII custodian, Citibank provides the following services to QFIIs:

  • Application for Securities Investment Licence to CSRC as well as Investment Quota to SAFE.
  • Application for opening of securities account and RMB settlement account with securities registration and settlement institution.
  • Transaction settlement of cash and securities, securities registration and confirmation of trades.
  • Safekeeping of securities.
  • Inform QFIIs of corporate actions (such as dividend payments, rights issues, options issues, shareholders meetings etc.).
  • QFII reporting – Providing real-time securities and cash transaction information and balances to QFII through electronic banking system. QFII can also access the system for its portfolio and valuation.
  • Receiving of dividend payments and interests into the RMB account.
  • Inward remittance of investment quota and outward remittance of gains and principal amounts and related cash management and F/X conversion services.
  • Regulatory reporting - includes reports on investment activities, annual financial reporting of the QFII investment, inward and outward remittances, F/X conversions, any violation of regulations (such as investment quota and share ownership) to the respective authorities.
  • Other services such as provision of market information and regulatory changes to QFII
Citibank's custody business arm in China has been top-rated for five years in a row* and the Bank has been rated / awarded Best Global Custodian in Asia Pacific and Best Custodian in Asia by a number of reputable publications in 2002**. Citibank is currently a custodian for B-shares and is one of the three clearing banks for the Shenzhen market. The Bank is also an active Receiving Bank player in both the Shanghai and Shenzhen markets of B-share rights issues. Citibank has also been actively involved in the B-share market since 1991, when the Bank advised on the design of the Shanghai B-share clearing system. In 1992, Citibank was formally appointed Technical Advisor for the B-share clearing systems and since then, has become the sole USD clearing bank for China Securities Depository and Clearing Company Limited - Shanghai Branch.

Citibank Global Securities Services serves global issuers, investors and intermediaries through the industry's largest proprietary network, spanning 50 countries. It currently provides securities services to more than 2,500 customers worldwide and has more than $5 trillion in assets under custody. Citibank is the industry's premier custodian of cross-border assets, top-ranked global clearer, and recognized leader in depositary receipt services and agency and trust services. Citibank's local presence, supported globally by Regional Service Centers, ensures clients of consistent transaction processing worldwide, proprietary control of clearing cycles and reduced risk in all cross-border securities transactions.

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Citigroup (NYSE: C), the preeminent global financial services company with some 200 million customer accounts in more than 100 countries, provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage, and asset management. Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Salomon Smith Barney, Banamex, and Travelers Life and Annuity. Additional information may be found at: www.citigroup.com.

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