Hoping to capitalize on the impending launch of open-ended funds in China, Deutsche Bank has entered into an exclusive alliance with the Bank of China (BOC) to jointly develop custody services in China.
Under the terms of the agreement, BOC will share its knowledge on local market practices and its network of local business contacts. "We will use the information to provide custody services for Chinese fund managers looking to invest overseas," says Ann Wong, spokesperson for Deutsche Bank.
Currently the market is tightly regulated and foreign banks are only allowed to participate in custodial services for the B-share market. "There are a lot of funds and deposits not yet captured in the official figures," Wong continues. "When the Chinese government opens the mutual fund market, this will be an alternative investment opportunity."
Deutsche Bank will reciprocate with its industry expertise on securities, ranging from fund administration, trustee services, securities lending to offshore securities services and cash management. The German bank will also provide training to BOC staff to increase the level of knowledge in a relatively inexperienced market.
Juergen Maziniak, global head of custody services, Global Transaction Bank for Deutsche Bank, says that this is an opportune time to enter into an alliance with the impending launch of open-ended funds in China. "This exclusive alliance with Bank of China is an important landmark for our Global Transaction Bank. It is a very clear signal that we are committed to out business in Asia," says Maziniak.
This is the first exclusive alliance in this area for both parties.