Chinese trust companies enter QDII game
Competition in QDII market intensifies as Chinese trust companies follow after banks, securities firms and fund houses in overseas investment.
Li Jianhua, vice director at China Banks Regulatory Commission, has announced several trust companies are getting ready to launch QDII business.
This is the latest development to follow on AprilÆs release of ôRegulation on overseas investment for trust companiesö. Compared to requirements for banks, insurance companies, securities firms and fund houses that have received QDII licenses to develop overseas investments products in the past, requirements for trust companies are higher. Registered capital for the trust companies is required to be above RMB1 billion, total AUM should exceed RMB10 billion, and their balance sheets must show positive growth in the past two years.
Two companies, Citic Trust and Sitico (Shanghai International Trust and Investment), have already received the so-called ætrial-licenseÆ in last September, as a testing point before the regulator issue official guideline. This brings more players on top of the latest entrants in fund houses and securities firms. Fortune SGAM, a joint venture of Societe Generale, and Citic Securities, China Merchants Securities, Guotai Junan Securities and China International Capital are some of the latest license recipients.
There are 54 registered trust companies in China managing a total of RMB6 trillion ($797 billion) across the country. The total number of fund houses has also recently increased from 58 to 62. There are also 104 securities firms gearing up to offer QDII services on a segregated accounts basis.
Not every trust company or brokerage will be granted a QDII license; the capital requirements can be onerous. But the ranks are growing, providing more opportunities for partnerships with foreign investment banks and fund management companies looking to enter this market.
This is the latest development to follow on AprilÆs release of ôRegulation on overseas investment for trust companiesö. Compared to requirements for banks, insurance companies, securities firms and fund houses that have received QDII licenses to develop overseas investments products in the past, requirements for trust companies are higher. Registered capital for the trust companies is required to be above RMB1 billion, total AUM should exceed RMB10 billion, and their balance sheets must show positive growth in the past two years.
Two companies, Citic Trust and Sitico (Shanghai International Trust and Investment), have already received the so-called ætrial-licenseÆ in last September, as a testing point before the regulator issue official guideline. This brings more players on top of the latest entrants in fund houses and securities firms. Fortune SGAM, a joint venture of Societe Generale, and Citic Securities, China Merchants Securities, Guotai Junan Securities and China International Capital are some of the latest license recipients.
There are 54 registered trust companies in China managing a total of RMB6 trillion ($797 billion) across the country. The total number of fund houses has also recently increased from 58 to 62. There are also 104 securities firms gearing up to offer QDII services on a segregated accounts basis.
Not every trust company or brokerage will be granted a QDII license; the capital requirements can be onerous. But the ranks are growing, providing more opportunities for partnerships with foreign investment banks and fund management companies looking to enter this market.
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