UBS and Nomura First Foreign Investors to Receive CSRC Approval on QFII Status in China

Citigroup acts as their QFII Custodian

Citigroup® Global Transaction Services announced today that its clients, Nomura Securities Limited and UBS Limited, have become the first foreign investors to be granted Qualified Foreign Institutional Investors (QFII) status by the China Securities Regulatory Commission (CSRC). As one of the first QFII Custodians in China, Citigroup assisted both UBS and Nomura in their QFII applications.

Richard M.F. Ernesti, Region Head of Securities Services, Citigroup Global Transaction Services Asia, said: "We are very pleased that CSRC approved the QFII applications of Nomura and UBS, both of which use Citigroup as the QFII Custodian in China. Having obtained CSRC's approval, we will continue to work with the State Administration of Foreign Exchange (SAFE) on their Investment Quotas and Foreign Exchange Licences required for QFIIs' investments."

Richard Stanley, Citigroup's Country Officer in China said: "The QFII measures mark another significant step in the opening of the Chinese markets to increased foreign participation. We look forward to playing an important role in the development of this activity."

Mr Ernesti added: "As a custodian, Citigroup acted as the primary communication channel between the QFII and the Chinese authorities. In the QFII licence application process, we work with the CSRC and SAFE to clarify each of our client's qualifications and documentation requirements. We also provide assistance on required documents and follow up closely with regulators on the approval process and status. Right now, Citigroup's operations, systems, client services and products in China are all ready to serve QFII clients."

As well as assisting foreign investors in their application for QFII licences, Citigroup provides the following services to QFIIs:

  • Application for, and opening of, securities account and RMB settlement account with the relevant authorities.
  • Transaction settlement of cash and securities and confirmation of trades.
  • Safekeeping of securities.
  • Inform QFIIs of corporate actions (such as dividend payments, rights issues, options issues 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 information 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.

Citigroup Global Transaction Services custody business arm in China has been top-rated for five years in a row and the Bank was rated / awarded Best Global Custodian in Asia Pacific and Best Custodian in Asia by a number of reputable publications in 2002. Citigroup 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. Citigroup 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, Citigroup 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.

###

Citigroup® Global Transaction Services is a leading provider of integrated cash management, trade finance and securities services for corporations, financial institutions, intermediaries and governments around the world. With over US$ 85 billion in average liability balances, more than US$ 5 trillion in assets under custody and the largest proprietary branch network, Citigroup's award-winning operating systems and Internet-based delivery channels enable clients to manage and monitor working capital and investments more efficiently, streamline transaction processing cycles, and re-engineer receivables and payment processes. Citigroup® Global Transaction Services provides clients with access to Citigroup's full range of capabilities and solutions along with an on-the-ground presence and in-depth knowledge of more than 90 local markets. For additional information, see www.transactionservices.citigroup.com.

About Citigroup
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, Smith Barney, Banamex, and Travelers Life and Annuity. Additional information may be found at: www.citigroup.com.

ARCHIVES