Li Yong, general manager of custody services at ICBC, discusses the development of its custody business in response to the fast-growing and changing asset management industry.
January 13, 2021 | -In 1998, the first batch of fund management companies such as China Southern Asset Management Co., Ltd., Guotai Asset Management Co., Ltd., Hua An Fund Management Co., Ltd., China Asset Management Co., Ltd, and Bosera Asset Management Co., Ltd. were established. This marked the beginning of China's asset management industry. In the next 20 years, the sub-sectors under asset management industry such as funds, insurance, trust, wealth management, and private equity entered a golden era of all-inclusive development which brought great development opportunities to the custody industry.
The scale of the industry increased nearly 17 times from RMB 9 trillion ($1.37 trillion) in 2009 to RMB 153.26 trillion ($23.39 trillion) at the end of 2019. Since the establishment of custody services in 1998, Industrial and Commercial Bank of China (ICBC) has maintained a leading position in the domestic custody industry. Faced with the ever-changing market environment, the global outbreak of COVID-19, and the impact of uncertain Sino-US relations on the capital market, how will ICBC respond and what can be expected in the future?
Establishing a strong custody business in line with rapid growth of asset management industry
Li summarised the core purpose of ICBC's custody servicesas “To protect investors’ rights by ensuring the compliance of asset managers to securities rules and regulations”. He shared that the main objective of the new regulations on asset management is to rectify the absence of regulation of asset managers in the initial development of the industry which resulted in the rampant growth of unregulated debt-based wealth management products. Stricter compliance
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