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Overview
 

I. Business Overview
Asset custody refers to safekeeping of customer assets and rendering of fund clearing, accounting, valuation and supervisory duties and other services related with investment management under the client's entrustment.
After more than a decade's development, the asset custody market has been growing rapidly in the Chinese Mainland, witnessing the scale of assets under custody rocketing from less than RMB1 billion at the beginning to RMB14.1 trillion at the end of 2016. Meanwhile, as our capital market steps up its internationalization pace and more and more financial innovations emerge, custody is increasingly used as important governance means. More and more investors, institutional financial investors and businesses resort to safe and efficient custody services.
On February 24, 1998, ICBC became the first custodian in the Chinese Mainland upon approval of the China Securities Regulatory Commission (CSRC) and People’s Bank of China (PBOC). As a custody pioneer, ICBC, which has always been adhering to “integrity and diligence”, boasts rigorous and scientific risk management and internal control systems, regulated business management model, advanced operation system and a professional team. It provides safe, efficient and professional custody services for investors, financial asset management institutions and corporate customers at home and abroad, demonstrating its sound reputation and great influence and winning long-lasting reliance and respect from customers.
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. With a complete range of custody products, ICBC took the lead in China to launch such value-added services as performance evaluation and risk management and other individualized custody services for different clients. ICBC plays a leading role in market innovation. Since the launch of custody services, it has participated in the development and custody of most domestic innovative products. It is also the first domestic bank to pass the International Standard on Assurance Engagements (ISAE) No. 3402 (the former SAS70) and make it an annual practice, and the first to launch and regularize disaster recovery drill for asset custody in China. Its innovation capability, service quality and risk control ability are highly recognized in the market.
In active response to customer needs, ICBC is committed to rendering the most professional custody services for excellent capital market players. Through building a global custody services network, ICBC has spread its custody services throughout China and the world, including extensive basic and value-added services for customers.
Scope of domestic asset custody services
Basic services: account opening, asset safekeeping, investment clearing, accounting, asset valuation, trading supervision, centralized payment, information disclosure etc.
Value-added services: investment assessment, performance evaluation, risk analysis, information consultancy, individualized statement preparation etc.
Scope of global asset custody services
Basic services: account opening, asset safekeeping, transaction settlement, accounting, asset valuation, corporate information, trading supervision, foreign exchange conversion, income receiving, record keeping, reporting and agency voting, etc.
Value-added services: performance evaluation, risk management, cash management etc.

II. Organizational Structure and Service Team
The Asset Custody Department consists of Comprehensive Management Division, Securities Investment Fund Division, Entrusted Asset Division I, Entrusted Asset Division II, Global Asset Custody Division, Product and System Development Division, Information and Value-added Service Division, Supervision and Risk Management Division, Operation Division I, Operation Division II, Operation Division III and Outsourcing Center, as well as many custody sub-departments in China. At present, all of ICBC’s 37 domestic tier-one branches (branches directly controlled by the Head Office) are offering asset custody services, and some overseas branches are also able to render such kind of services.
As of the end of December 2016, the Asset Custody Department had employed 207 employees, 90% of which had bachelor’s degrees or higher and practitioner qualifications. All departmental managers and above have postgraduate degrees or higher, or senior technical titles.
With spirits of innovation, ICBC’s asset custody team has put forward many business proposals, some of which have become the benchmark in the domestic custody industry. With rich experience and a professional team, ICBC has its presence as custodian representatives in many regulators and counselors in the industry:
Part-time Vice Chairman of Asset Management Association of China;
The first Chairperson Institution of Custodian Services Committee, China Banking Association;
Co-Chairman of China Securities Market Practice Group (CN SMPG);
Member of Fund Industry Committee of China Securities Industry Association;
Member of Insurance Asset Management Association of China;
Leader of Money Market Fund Shadow Pricing Team;
Leader of Securities Investment Fund Valuation Team;
Member of Electronic Fund Disclosure Standards Team;
Product valuation expert of the Shanghai Clearing House Co., Ltd.;
The first Chairperson of Custodian Specialized Committee of Corporate Annuity Branch of China Social Insurance Association;
The only custody bank member of Occupational Annuity Investment Operation Research Team of the Ministry of Human Resources and Social Security; and
Leader of the pension fund Supervision Information Industry Standard Implementation Group of the Ministry of Human Resources and Social Security.

III. Advantages
I. As the earliest custodian in China, ICBC has rich experience.
In February 1998, ICBC became the first bank to obtain custodian qualifications for securities investment fund in the Chinese Mainland upon approval of the CSRC and PBOC. In March the same year, it became the first custodian for Kaiyuan Fund and Jintai Fund. Afterwards, as China’s securities market continued to open up to the outside world and develop rapidly, ICBC’s custody services witnessed robust development, leading the industry at home.

II. As the best custodian in China, ICBC enjoys a sound brand.
ICBC has been ranked first in the industry in annual comprehensive evaluations on fund custodians organized by the CBRC and PBOC. Since 2004, ICBC has been granted 48 best custodian awards by domestic and overseas authoritative financial media, the largest prize winner in China.

III. As the biggest asset custodian, ICBC has market advantages.
As at the end of 2016, all sorts of assets under its custody had exceeded RMB1.4 billion in net value, keeping the biggest market share for 18 consecutive years. With a sophisticated custody business system, ICBC boasts the widest variety and the biggest size of custody business.

IV. With the largest customer base, ICBC has advantages in customer resources.
ICBC has established long-term partnership with domestic securities companies, fund management companies and other corporate customers, engaging in banking-securities, banking-trust, banking-fund and banking-insurance cooperative businesses. As a major player in the domestic inter-bank bond market, inter-bank lending market and securities-pledged financing market, ICBC has been maintaining close cooperative relations in custody business with multiple large and medium-size financial institutions and large corporations at home and abroad. With the largest number of customers in China, the custodian receives high recognition from its customers.

V. Taking initiatives to manage nearly all innovative financial products in China, ICBC enjoys advantages in innovation.
Starting from 1998, ICBC took initiatives to launch custody services for such innovative products as index fund, bond fund, principal-guaranteed fund, money market fund, listed open-ended fund (LOF), exchange traded fund (ETF), replicate fund, innovative close-ended fund. It is also the first bank to provide full-process and full-amount custody services for insurance assets, the first QFII (qualified foreign institutional investor), QDII (qualified domestic institutional investor) and ESCROW custodian, the first custodian for corporate annuity fund and asset securitization products in China. ICBC always closely follows innovation trend in the market to meet customers’ needs.

VI. As the biggest clearing bank in China, ICBC has advantages in fund settlement efficiency.
With the advanced fund clearing system, ICBC is the commercial bank handling the biggest settlement business in China. Taking advantageous of its powerful fund settlement network and clearing system, ICBC provides express settlement of funds under custody, eliminating risks of funds in in-process and manual clearing and ensuring safe and quick clearing. Inter-bank clearing is based on the modern CNAPS payment system, which ensures quick, secure and reliable payment in the system for inter-bank clearing of assets under custody.

VII. With the powerful custody technology and information system, ICBC boasts technological advantages.
As the sole commercial bank to develop its own custody business system in the Chinese Mainland, ICBC has studied, developed and launched five generations of comprehensive custody business system on its own. In July 2007, the fourth-generation custody system independently developed by the bank came into service. Fully supporting new and old international accounting standards, the system provides strong technical guarantee for multiple sets of accounting standards, cross-market operations, multiple valuation methods and multiple statement operations under global custody business. In July 2011, the fifth-generation custody system was put into operation, signaling that ICBC became the first custodian to adopt standardized procedures among Chinese banking custodians. In the meanwhile, the overseas extension of global custody system (Hong Kong Phase II) was staged successfully, enabling ICBC (Asia) to offer basic custody services in Hong Kong.

VIII. With a tight risk prevention and control system, ICBC has advantages in risk control for asset custody.
ICBC has always been attaching equal importance to risk management and business development in custody services. ICBC has built and is deploying a multi-layer risk control system for asset custody. In 2005, ICBC became the first to introduce and pass the SAS70, international audit standards for internal control, and make it a regular internal control mechanism. Since 2007 when it successfully conducted the first disaster backup drill in the industry at home, ICBC has been staging one such drill for its custody business every year. In 2009, it carried out the first random emergency drill in the domestic custody industry. Disaster backup drill has become a regular internal control measure to ensure continuous and normal operations of the custody business in emergencies or disasters.

IX. With a professional performance evaluation system, ICBC boasts advantages in value-added services.
Performance evaluation & risk analysis system is one of the projects jointly developed by ICBC and overseas business partners. Geared to international standards, the system has access to powerful data and information from the Bank and outside data suppliers for calculating multiple performance and risk indicators. It is able to provide multi-layer performance attribution analysis and all sorts of report portfolios tailored to customers’ needs. In July 2011, the performance evaluation system (phase I) independently developed by the Bank came into service. This performance evaluation system, the first independently developed and launched in the industry, helps to provide quality and efficient one-stop performance evaluation services based on a uniform internal platform and uniform processing flow.

X. With a powerful consultancy system, ICBC has information advantages.
ICBC has set up an information consultancy and management system, an information service team exclusively engaged in information collection and management. A multi-dimension information service system consisting of the Internet, telephone, fax, mail and manual operation has taken shape to provide information consultancy for customers. Relying on its advantageous business resources, ICBC has built a full-coverage extensive database of base information, which is updated on a real-time basis every day. Meanwhile, the bank keeps active contacts with domestic and foreign information suppliers to boost its capacity of handling global custody information.

XI. With some employees acting as technical panel leaders and industry standard setters, ICBC boasts advantages in expertise.
ICBC is the chief member of Custodian Services Committee, China Banking Association, taking the lead to advocate and organize all the members to sign the Self-discipline Convention for the Custody Business of the Banking Industry of China, and calling the members to study hot issues in the domestic custody industry. It has organized industry experts to complete a number of subject studies, fulfilling its social responsibilities in facilitating industry construction. ICBC's asset custody experts have been appointed as panel members by the regulators and trade associations. They have been invited to many significant meetings as sole custodian representatives and actively offered constructive views and comments, most of which were well received and adopted.

XII. Actively building a global custody network, ICBC boasts advantages in cross-border services.
By far, all the 37 tier-one branches (branches directly controlled by the Head Office) have been authorized to handle custody business. The domestic custody business network has basically taken shape. Meanwhile, ICBC makes good use of its domestic and foreign branches and customer resources to actively advance the construction of its global custody network platform, and assists qualified overseas branches in starting custody business. The global custody services network is taking shape. Besides, ICBC steps up its cooperative efforts with international banking custodians. Through fostering sound partnership with global renowned custodians, ICBC ranks first in global custody business development such as QFII, QDII and ESCROW.

IV. History
〇 1998
In February, it became the first bank to obtain custody qualifications for securities investment fund in China.

In March, it provided custody services for the first close-ended securities investment funds in China—Kaiyuan Fund and Jintai Fund.

In March, it took the lead to launch the first-generation financial system for fund custody in China.

In March, it set up two custody subsidiaries in Shenzhen and Shanghai.

〇 2001
In September, it provided custody services for the first open-ended securities investment fund in China—China Southern Stable Growth Fund.

In September, it launched the second-generation custody business system, the first to support normal operation of open-ended fund custody in China, that is, a reasonable interconnection fund financial system.

In December, it obtained custody qualifications for social insurance fund, corporate annuity fund and entrusted assets.

〇 2002
In September, it provided custody services for the first bond fund in China—China Southern Baoyuan Bond Fund.

In November, it obtained asset custody qualifications, including trust assets, basic pension insurance fund (personal account), social security fund in rural areas, investment-linked insurance products and income & expenditure account funds.

In November, it rendered custody services for the first open-ended index fund in China—HuaAn-SSE 180 Enhanced Index Fund.

In November, it obtained custody qualifications for domestic securities investment funds of OFII (qualified foreign institutional investor).

〇 2003
In June, it provided custody services for the first principal-guaranteed fund in China—China Southern Principal Guaranteed & Value-added Fund.

In August, it obtained custody qualifications for industry funds.

In October, it launched the third-generation fund accounting & assessment system (AAS) to handle centralized data processing of its custody business across the country.

In December, it offered custody services for the first money market fund in China—HuaAn Fuli Cash Fund.

〇 2004
In October, it provided custody services for the first LOF (listed open-ended fund) in China—China Southern Active Allocation Fund.

In December, it offered custody services for the first ETF (exchange traded fund) in China—Huaxia-SSE 50 ETF.

〇 2005
In January, it provided custody services for the first insurance fund entering the securities market in China-Huatai Insurance Fund.

In February, it became the first in China to obtain custody qualifications for insurer’s equity investment upon approval of the China Insurance Regulatory Commission.

In March, it took the lead to introduce SAS70, the international audit standards for internal control, and obtained the unqualified SAS70 audit report after nine months’ review.

In August, it obtained custody qualifications for corporate annuity fund upon approval of the Ministry of Human Resources and Social Security.

〇 2006
In June, it provided custody services for the first corporate annuity fund entering the market in a compliant manner in China.

In July, it provided custody services for the first replicate fund in China-China Southern Stable Growth Fund II.

In September, it offered custody services for the first banking QDII product in China--Bank of China USD Enhanced Cash Management.

In October, it launched the Internet banking service system for custody business, extending the custody services to the client through the Internet.

In November, it provided custody services for the first securities company’s QDII product in China-HuaAn Global Allocation Fund.

〇 2007
In July, it provided custody services for the first innovative close-ended fund in China-UBS SDIC Classified Equity Fund.

In July, it signed a custody agreement with the National Council for Social Security Fund to officially manage the national social security fund.

In July, it launched the fourth-generation core custody system-custody financial management system independently designed and developed by ICBC with complete intellectual property right.

In September, it provided custody services for the first fund company’s equity QDII fund in China-China Southern International Select Allocation Fund.

In October, it launched the asset custody transactions supervision system (CARC) independently designed and developed by ICBC with complete intellectual property right.

In December, it staged the first inter-city disaster recovery drill in the fund industry. It succeeded in recovering all key operations within two hours, and the drill scored expected effects.

〇 2008
In March, it provided custody services for the first asset management scheme for specific customer of fund company in China.

In March, it rendered custody services for the first charity fund in China.

〇 2009
In February, it launched the custody services system for Anxin Account in the Bank.

In March, it provided custody services for the first special QDII product in China.

In July, it launched the custodian-management company data processing system.

In July, authorities for custody business were granted to five branches, Shenzhen, Beijing, Shanghai, Guangzhou and Zhejiang.

In August, it provided custody services for the first asset management schemes for multiple customers of fund company in China.

In December, it provided custody services for the first ESCROW product in China.

〇 2010
In July, it provided custody services for the first cultural industry fund in China-China Media Capital.

In August, it offered custody services for the first investable stock index fund in China-China Securities Index-China Security Southern Well-off Industry Index ETF Linked Fund.

〇 2011
In January, it provided custody services for the first gold fund in China-Lion Global Gold Securities Investment Fund.

In May, it provided custody services for the first bond index fund in China-China Southern-China Securities 50 Bond Index Fund.

In July, it launched the fifth-generation core custody processing system, the first to adopt standardized procedures in the domestic industry.

In July, it launched the asset custody performance assessment system (CIPS) independently designed and developed by ICBC with sole intellectual property rights.

〇 2012
In March, it became a pilot bank for QFLP (qualified foreign limited partner) custody in Beijing to provide custody services for a number of QFLP products. It is also the custodian for the first equity investment fund for QFLP in Beijing and even China, as well as the custodian for most QFLP products in Beijing.

In April, it launched the electronic fax program for custody business.

In May, it provided custody services for the first cross-market ETF in China-Huatai-PineBridge CSI 300 ETF.

In May, it provided custody services for the first wealth management bond fund in China-China Universal Wealth Management 30-day Bond Fund.

In June, ICBC (Asia) officially set up its Asset Custody Department.

In August, it provided custody services for the first seed fund in China-Tian Hong Bond Seed Fund.

In October, New York Branch started to offer custody services for QDII products in the US market.

In November, it provided custody services for the first classified collective scheme for securities companies in China-Guotai Junan Jundefeng No.1 Classified Bond Collective Asset Management Scheme.

In November, it launched a comprehensive custody system for capital from corporate customers throughout the Bank.

In December, it provided custody services for the first listed money market fund in China-China Universal Cash Express Money Market Fund.

In December, it provided custody services for the first immovable project invested with insurance funds in China.

〇 2013
In April, it provided custody services for the first securities investment asset management scheme for future company in China-Huatai Great Wall Futures “Yueyuezeng" No. 1 Valuation & Arbitrage Asset Management Scheme.

In April, ICBC (Macau) officially set up the Asset Custody Department.

In May, it provided custody services for the first corporate annuity & pension product in China-Changjiang Pension Insurance-State Grid Yingda Trust Pension Product.

In June, it filed an application for outsourcing fund business to the China Banking Regulatory Commission and China Securities Regulatory Commission.

In July, it provided custody services for the first gold ETF in China-Guotai Gold ETF.

In August, it became the first to launch bill custody services in China and concluded the first bill custody transaction.

In September, it officially signed an agreement on pilot program for outsourcing of accounting and valuation of special accounts.

In December, it signed an agreement on pilot program for outsourcing of TA performance and returns calculation.

V. Honors and Achievements
In March 2004, ICBC was honored as the sole “Best Domestic Custodian (China)” in the first best custodian selection in the Chinese Mainland by the Hong Kong Asiamoney. Then, ICBC has won a total of 51 best custodian awards granted by domestic and foreign authoritative financial media such as the British Global Custodian, Hong Kong-based The Asset, the American Global Finance, Securities Times and Shanghai Securities News for many years consecutively. As a domestic custodian reaping the most awards, ICBC has won constant recognition and widespread praise in the domestic and foreign financial fields with its quality services, seeing increasing international influence and brand awareness.
As of the end of 2016, assets under custody of ICBC exceeded RMB14 trillion, securing the largest scale in the banking industry for 18 consecutive years. In 2016, riding on the excellence performance in domestic and overseas custody business area and strong brand influence, the Bank was named the “2014 Best Custodian Bank in China” by The Global Finance, The Banker and the Shanghai Clearing House successively.

1


The Chinese Banker

2015 Top Ten Financial Product Innovation Award

2


Shanghai Clearing House

2014 Best Custodian Bank of China

3


Global Finance

2014 Best Subcustodian Bank of China

4


Global Finance

2013 Best Subcustodian Bank of China

5


The Asset

2013 Best Custodian Bank of China

6


Global Custodian

2013 Best Custodian Bank of China

7


Financial Money

Best Custodian Bank of China

8


AsianInvestor

Best direct custody, China

9


The Chinese Banker

2012 Top Ten Financial Product Innovation Award

10


The Asset

2012 Best Custodian Bank of China

11


Global Finance

2012 Best Subcustodian Bank of China

12


Global Custodian

2012 Best Custodian Bank of China

13


INVESTOR JOURNAL

2012 Best Fund Custodian Bank of China

14


Financial Money

Best Custodian Bank of China

15


hexun.com

2012Best Asset Custodian Bank of China

16


National Business Daily

2012 Best Fund Custodian Bank of China

17


The Asset

2011 Best Custodian Bank of China

18


Global Custodian

2011 Best Custodian Bank of China

19


Global Finance

2011 Best Custodian Bank of China

20


Zero2IPO Group

China Venture Capital & Private Equity Annual Awards——VC/PE Fund Custodian Bank of the Year 2011

21


hexun.com

2011 Best Asset Custodian Bank of China

22


Financial Money

Zhou Yueqiu - 2011 Outstanding Achievement in Assets Custody

23


The Asset

2010 Best Custodian Bank of China

24


Global Custodian

2010 Best Custodian Bank of China

25


Global Finance

2010 Best Custodian Bank of China

26


Global Custodian

2009 Best Asset Custodian Bank of China

27


The Asset

2009 Best Asset Custodian Bank of China

28


The Asset

Zhou Yueqiu - 2009 Custodian Banker of China

29


Global Finance

2009 Best Asset Custodian Bank of China

30


The Asset

2008 Best Custodian Bank of China

31


Global Custodian

2008 Best Custodian Bank of China

32


Global Finance

2008 Best Custodian Bank of China

33


Securities Times

2008 Best Fund Custodian Bank of China

34


Almanac of China’s Securities Investment Funds

2008 Best Asset Custodian Bank of China

35


The Asset

2007 Best Custodian Bank of China

36


Global Custodian

2007 Best Custodian Bank of China

37


Global Finance

2007 Best Custodian Bank of China

38


Securities Times

2007 Best Custodian Bank (Fund) of China

39


Digital Times

2007 Financial Honor Roll——Best Custodian Bank of China

40


Shanghai Securities News

2007 “Golden Fund Award”——Award for 10 Years’ Outstanding Contribution

41


Securities Association of China

The “Project of Centralized Custody of Securities Investment Fund Accounts” won 2007 Best Innovation Award of Securities and Futures S&T Award

42


Global Finance

2006 Best Custodian Bank of China

43


The Asset

2006 Best Custodian Bank of China

44


Global Custodian

2006 Best Custodian Bank of China

45


The Asset

2005 Best Custodian Bank of China

46


Global Custodian

2005 Best Custodian Bank of China

47


Global Custodian

2004 Best Custodian Bank of China

48


Asia Money

2003 Best Custodian Bank of China


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