Securities Investment Fund Custody Service

Introduction

In order to protect the interests of the securities investment funds investors and prevent the diversion of funds and property, fund custodians must be commissioned to safekeep the fund property of the securities investment funds in accordance with the state regulations. The fund custodian should be a qualified commercial bank that enjoys certain asset and credit. The custodian should be in charge of the daily investment of the fund, and fulfills the rights and obligations empowered by laws, regulations and fund contract. The custodian should protect the interests of fund holders, by opening an independent fund account, conducting settlement and delivery according to fund managers’ orders, keeping the fund safe, and monitoring the fund business within the scope set by relevant rules and fund contract. It should be paid with custody charges.

In March 1998, after being approved by the China Securities Regulatory Commission (CSRC) and People’s Bank of China, CCB became the second custody bank in China that is qualified to do securities investment fund custody business. CCB conducts such business as a state-owned commercial bank. It has established a Department of Fund Custody, the settlement and delivery system that is safe and efficient, qualified business space, securities measures, and other facilities related to fund custody business.

Content of Services

1.Asset custody business. CCB is in charge of keeping the entire fund asset, as well as the records, accounting books, sheets, and other related materials of the business.

2.Fund settlement business. CCB conducts settlement and delivery business according to the investment orders by the fund managers, following the provisions in fund contract.

3.Investment operation surveillance. CCB monitors the investment activities of fund managers, following the laws, fund contract and custody agreement.

4.Accounting business. CCB opens different accounts for funds under custody so as to guarantee the integrity and independence of each fund. CCB provides information release for the custody business, and issues comments on fund financial report, the medium-term and annual fund report. It also checks and reviews the fund net value, purchase requisition and redemption price provided by the fund manager.

Service Channels and Networks

The authority of securities investment fund custody business concentrates in the head office, the fund custody divisions assist the head office for customer services of fund management companies as well as business relationship of stock exchange and bond registration companies.