QFII custodians seek a better deal

Custodians seek to reduce risk - and ultimately costs to clients - in China''s upcoming QFII scheme.

Global sub-custodians Citibank, HSBC and Standard Chartered, all of which have been granted permission by the People's Bank of China to act as custodians for China's emerging qualified foreign institutional investor QFII scheme, are lobbying hard for changes to the rules in order to mitigate risk.

Bankers want to create a matching and error-rectification process. Currently, custodians face principal risk, explains Richard Ernesti, regional head of global securities services at Citibank. Say a QFII licence holder orders a...

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