Deutsche Bank has facilitated a margin trading and securities lending transaction under China’s expanded Qualified Foreign Institutional Investors (QFII) and RMB Qualified Foreign Institutional Investors (RQII) schemes.
A QFII licence allows international investors to participate in mainland China's stock exchanges. As of November 2020 the abilities of licenced investors expanded to include securities finance and short selling.
The new rules have also lowered entry requirements and simplified procedures under the combined quota-free QFII and RQFII.
On 28 December 2020 the China Securities Depository and Clearing Corporation opened the application and registration channel for margin securities accounts.
Deutsche Bank China has confirmed it supported a qualified foreign investor as its China onshore custodian bank on the first day of trading under the new rules.
According to Deutsche Bank, it offered a full suite of custody services including account opening, asset custody, cash transfer and regulatory reporting, and helped in completing a smooth transaction on the first trading day of margin trading and securities borrowing under the new rules.
Tony Chao, head of securities services Greater China and head of securities services sales in North Asia at Deutsche Bank, said: “The opening of margin trading and securities borrowing through the QFII/RQFII scheme expands the investment product scope and increases the diversification of investment strategies available to foreign investors. It also helps in improving fund efficiency, providing investors with greater flexibility to investment strategies and portfolio execution.”
The German bank also received a domestic fund custody licence recently, and says it is also one of the most active foreign settlement agents in the China Interbank Bond Market.
Deutsche Bank offers custodian services in more than 70 major markets globally, including 12 markets with dedicated teams in the Asia Pacific region.
Other global banks to take advantage of the new rules to help clients engage in securities lending include, HSBC, Standard Chartered and Citibank.
