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Custody Service for QDII
I.Product Overview
On April 18, 2006, the PBOC, CBRC and SAFE, under the approval of the State Council, jointly issued The Interim Administrative Measures for Commercial Banks to Provide Overseas Wealth Management Services, which allowed domestic institutions and residents to invest in overseas financial products by entrusting a domestic commercial bank, marking the overall introduction of the long-awaited QDII (Qualified Domestic Institutional Investors) system in China. In the meantime, relevant measures provided that a custody mechanism must be introduced for the operation of QDII business. Soon afterwards, some commercial banks, fund management companies, securities companies and trust companies were granted QDII qualification and investment quota in succession.

II.Target Customers
According to relevant QDII regulations, the QDII custody services of ICBC mainly target at:
i. Commercial banks;
ii. Insurance companies;
iii. Fund management companies;
iv. Trust investment companies;
v. Securities companies; and
vi. Other institutions approved by regulatory authorities.

III. Scope of Services
ICBC provides domestic institutions with comprehensive, professional and quality QDII custody services, including basic custody services and value-added custody services.
i. Basic services
(1) Account opening: open domestic and overseas custody accounts;
(2) Asset custody: provide asset custody service for QDII customers;
(3) Settlement of transaction: complete securities delivery and clearing for overseas investments of QDII customers;
(4) Accounting: list QDII investment activities in the account books;
(5) Asset valuation: valuate QDII investment assets according to international accounting standards;
(6) Company information: provide the information about QDII securities holdings and financial market news;
(7) Transaction supervision: supervise shareholding ratio according to QDII portfolios and regulatory requirements;
(8) Foreign exchange conversion: currency conversion, and foreign exchange settlement and sales;
(9) Receipt of income: track equity income on a real-time basis, and ensure that it can be timely recorded into accounts;
(10) Proxy voting: overseas proxy voting under the entrustment of customers;
(11) Reporting service: provide customers with reports on investment and clearing on a regular basis;
(12) Record keeping: properly keep the records on investment and fund inflows/outflows and other materials;
(13) Other services: other services required by regulators.
ii. Value-added services
(1) Performance evaluation: performance estimation and evaluation for QDII portfolios;
(2) Risk management: QDII investment risk warning and risk assessment report;
(3) Cash management: multiple cash management instruments for QDII customers;
(4) Electronic banking: uploading and downloading of electronic banking data;
(5) Tax agency: declare and pay taxes for QDII customers as an agent;
(6) Customized reports: provide reports in customized types and formats;
(7) Securities lending/borrowing: lend and borrow designated securities as entrusted by customers;
(8) Other services: other customised requests proposed by QDII customers.

Over the years, the early involvement and in-depth research on QDII custody services by ICBC has made the bank maintain a leading position in the banking sector in terms of such business.
It has successfully provided custody services for several “first” products, including: the first domestic overseas wealth management product of commercial bank (banking QDII product) – BOC USD Enhanced Cash Management (September 2006); the first domestic QDII product of fund company (fund QDII product) – HuaAn International Allocation Fund (November 2006); and the first domestic stock QDII product of fund company – Southern Global Selected Allocation Fund (September 2007).
As the largest custodian bank in China, ICBC has maintained its leading position in the market for 18 consecutive years in terms of market share of asset custody business.
It is also the most professional custodian bank in China, with an advanced custody service system independently developed by it. The system has obtained ISAE3402 authentication (formerly known as SAS70), the first one of its kind in China, indicating that ICBC’s internal control of custody services has met international standards.

V.Flow Chart

VI.Contact Information
If you would like to apply for any service, please contact the Global Asset Custody Division of Asset Custody Department of ICBC:
Liaison: Jia Wenhui, Chang Yue, Fan Mei, Feng Peini, Sun Yang, Wang Qiu, Wang Zhongwei
Tel.: (8610)66105757/5756/5700/5753/5754/5755/81013751
Fax: (8610)66105753
E-MAIL: wenhui.jia@icbc.com.cn