Citi receives futures margin depository bank license in China

Citibank (China) Co Ltd announced Friday that it has received a futures margin depository bank license from the China Financial Futures Exchange to act as a futures margin depository bank for clients in the China futures market.

"As the first American bank granted the FMDB license in China, this new license enables Citi to provide futures margin deposit services to our QFII and RQFII clients," said Christine Lam, president and CEO of Citi China.

"FMDB is a cash-related service and this adds to our ability to serve clients and demonstrates our commitment to global clients to provide them a complete market access solution for China. We are honored to be making a further contribution to support the continued opening-up of Chinese financial markets," Lam said.

China has unveiled a shortened negative list for market access of foreign investment, removing restrictions on a wide range of sectors. Restrictions on the ownership by foreign investors in entities such as securities firms, fund management companies and futures companies will be relaxed to 51 percent this year and is set to rise to 100 percent by 2021.

In China, qualified foreign institutional investors and the renminbi qualified foreign institutional investors who trade equity index futures instruments on the China Financial Futures Exchange must open a margin deposit account with a licensed futures margin depository bank. The FMDB plays a crucial role in facilitating the movements of margin payments associated with futures traded on the exchange.

"Citi China's FMDB license is a piece of welcoming news for many of our QFII and RQFII clients," said Harry Peng, managing director and head of prime, futures and securities services for Citi China. "We are in a unique position – as the only American bank who can offer a complete solution to international investors to invest into China, whether it's equity or fixed income, directly (QFII, RQFII and CIBM direct scheme) or via Hong Kong (Stock Connect and Bond Connect), end to end, from sales, trading, research to custody, clearing and settlement. We have the full licenses and capabilities in China on the ground."

In providing cross-border securities services, Citi has more than 20 years of experience in China's capital market custody services, witnessing the opening-up of China's capital markets. Citi has fully participated in the development of China's qualified domestic institutional investor and qualified foreign institutional investor markets, including policy recommendation, domestic and international market development.

Yigen Pei, managing director and head of Citi China treasury and trade solutions, said: "It has been 20 years since Citi started to offer cash and treasury services in the China market. The FMDB license is an important milestone that sees us extend our cash and treasury services to clients that trade on financial exchanges."