HSBC wins China Luxembourg mandate

HSBC reports that it has been mandated as custodian bank in China for Industrial and Commercial Bank of China (Europe) SA (ICBC Europe), which recently secured regulatory approval as a Luxembourg-based Renminbi (RMB) Qualified Foreign Institutional Investor (RQFII).

Luxembourg marks the fifth RQFII market in Europe and HSBC notes that it is supporting the first investors from each of these markets. ICBC Europe’s RQFII license also continues HSBC’s 100 percent track record of successful quota applications on behalf of its clients, the bank adds.

Sophia Chung, head of securities services, China, HSBC, said: “We expect institutional investors across Europe to use Luxembourg as a gateway to China and we also expect more Chinese financial institutions to establish a fund domiciled in Luxembourg.”

ICBC is one of six Chinese banks with a presence in Luxembourg. Bing Li, Head of Asset Management Department at ICBC Europe, described this mandate as a key milestone, which further strengthens its position in Europe. HSBC calculates that as of October 31 it was the custodian bank for RMB 200.6 billion of RQFII investment quota, 48 per cent of the total amount approved.

HSBC takes the opportunity to remind readers that it has recorded a number of “firsts” in servicing institutional investors in addition to this latest development:

1992:   The first and only onshore-based foreign bank to offer B-share custody;

2003:   One of the first foreign custodians to offer QFII custody;

2009:   One of the first two foreign banks to offer QFII cash clearing  services;

2011:   The first QFII custodian bank to clear the ETF creation/redemption;

2011:   The first foreign custodian bank to offer RQFII custody;

2013:   One of the first QFII custodians to facilitate QFII trading into index futures;

2013:   First foreign bank in mainland China to offer futures margin depository services to its own QFII/RQFII clients;

2014:   First custodian bank servicing UK RQFII, France RQFII, Korea RQFII;

2014:   First foreign custodian servicing Singapore RQFII;

2014:   Custodian bank for the first  London-Listed RQFII ETF;

2014:   Custodian bank for the first HK-Listed RQFII Bond ETF;

2015:   First custodian bank servicing RQFIIs in Germany, Australia, Switzerland and Canada;

2015:   Custodian bank for the first RQFII money market ETF listed in London.