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Custody Service for RQFII

I. Product Overview
RQFII (RMB Qualified Foreign Institutional Investors) system is an important move adopted by the Chinese Government to accelerate RMB internationalization by limited liberalization of its capital market under the circumstances of foreign exchange control and incompletely free convertibility of RMB in China. On December 16, 2011, CSRC, PBOC and SAFE jointly released the Pilot Measures for the Securities Investment in China by RMB Qualified Foreign Institutional Investors of Fund Management Companies and Securities Companies, marking the formal pilot of RQFII system. Soon afterwards, CSRC, PBOC and SAFE successively issued the regulations on implementation of pilot measures, signifying the formal implementation of RQFII system. It is specified that RMB qualified foreign institutional investors should entrust a domestic commercial bank as their custodians to manage their assets.

II. Target Customers
According to the Pilot Measures for the Securities Investment in China by RMB Qualified Foreign Institutional Investors of Fund Management Companies and Securities Companies, ICBC provides RQFII custody services mainly for asset management licensed companies in the countries where RQFII quotas are located.

III. Scope of Services
i. Basic services
(1) Agency service: assist in the application for RQFII qualification, investment quota, opening of special RMB account and securities account, and proxy voting etc.;
(2) Safekeeping: provide asset custody service for RQFII customers;
(3) Settlement of transaction: complete securities delivery and clearing for domestic investments of RQFII customers;
(4) Accounting: list RQDII investment activities in the account books;
(5) Asset valuation: valuate the assets invested by RQFII customers;
(6) Company information: provide the information about RQDII securities’ holdings and financial market news;
(7) Transaction supervision: supervise shareholding ratio according to RQDII portfolios and regulatory requirements;
(8) Foreign exchange conversion: currency conversion, and foreign exchange purchase;
(9) Record keeping: properly keep the records on investment and fund inflows/outflows and other materials;
(10) Other services: other services required by regulators.
ii. Value-added service
(1) Performance evaluation: performance estimation and evaluation for RQDII portfolios;
(2) Risk management: RQDII investment risk warning and risk assessment report;
(3) Cash management: multiple cash management instruments for RQDII customers;
(4) Electronic banking: uploading and downloading of electronic banking data;
(5) Tax agency: Declare and pay taxes for RQDII customers as an agent;
(6) Customized reports: provide reports in customized types and formats;
(7) Other services: other customised requirements proposed by RQDII customers.

IV. Advantages
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 custody services have met international standards.
ICBC, the most powerful domestic commercial bank, owns a fast clearing network, abundant RMB funds and strong A share settlement capability, hence it can provide RQFII customers with efficient and comprehensive service support.

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