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This mandate will include securities services, fund administration and fund accounting in Hong Kong, Indonesia, Malaysia, South Korea, Philippines, Taiwan, Thailand and Vietnam. Aside from providing both domestic and global custodian services in these markets, Citigroup will also provide investment accounting services for the assets and act as the securities lending agent in markets where it is permitted by local regulation.
According to the bank, the request for proposal (RFP) process began for five months ago, with four banks, including Citigroup, invited by Prudential to pitch for the business. The RFP process also entailed a region wide on-site due diligence of Citigroup facilities by Prudential reviewers and presentations to the company by various service providers.
According to Prudential, the decision to appoint a custodian bank came through a review of existing custody services used regionally. Following this process, the firm then decided to support the development of a leading edge finance function regionally, of which required the experience of an international custodian with an established regional footprint.
When selecting the bank, the core objectives for Prudential was primarily to optimize asset servicing under a safe and stable custodian network, implement system integration and automation, a securities finance function and enhance liquidity. The firm was also looking to improve client service, relationship management and move forward in other general efficiency improvements.
Prudential officials say that it choose Citigroup to provide these services for its ability to offer a comprehensive yet customized solution across nine countries with a flexible and competitive pricing structure. It also required that its custodian bank met its needs of differing local rules and regulations across the different countries, as well as customise its reporting and integration functions.
Prior to appointing Citigroup, Prudential appointed custodians on a local basis in each market.
Additionally, the mandate will not signal a significant headcount in PrudentialÆs back office in Asia. According to the firm, its fast level of expansion in the region will result in a redeployment of staff, rather than making them redundant.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
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SGX’s new framework for Spacs will likely provide investors with a much-needed channel for direct deals, but the verdict is still out on whether it will bring liquidity to the bourse.