ICBC Europe enters European investment fund industry?

Industrial and Commercial Bank of China (Europe) S.A. has become the first EU-registered Chinese bank to enter the European investment fund industry?, as its UCITS fund has received approval by the Luxembourg regulator on Wednesday.

The UCITS fund established by ICBC Europe is an actively managed investment fund focusing on investing in China's onshore inter-bank bond market and is to be distributed to European investors.

UCITS, which stand for Undertakings for Collective Investment in Transferable Securities Directives, are funds created in Europe and recognized by institutional investors globally.

Luxembourg's status as the financial center with the largest number of investment funds in Europe has made it also a hub for UCITS. In recent years there is a great growth of Luxembourg domiciled UCITS investing in China's onshore financial market opportunities.

According to ICBC Europe, the establishment of the new UCITS is a move to further enrich the renminbi product line offered by ICBC Europe, as well as facilitating further growth of ICBC Group's private banking and asset management businesses in Europe.

After registration in Luxembourg, the ICBC UCITS will also be distributed through the branches of ICBC Europe in France, Italy, Spain, Belgium and the Netherlands.

ICBC first had a presence in Luxembourg in 1998 as a representative office, which was quickly upgraded to a branch in 1999. In 2006, ICBC established a subsidiary in Luxembourg in order to prepare for the bank's expansion to other European countries using the EU's Single Passport policy.

In January 2011, ICBC established five European branches, in Paris, Amsterdam, Brussels, Milan and Madrid. At the same time, ICBC (Luxembourg) SA changed its name to ICBC (Europe) SA, to signify its position as the bank's European headquarters.

The five branches quickly grew and all of them achieved profits in the first six months of their operation ending in June 2011. Having achieved success, ICBC then established its Warsaw and Barcelona branches in November 2012.

In September ICBC Europe also became a renminbi clearing bank for Luxembourg, which means it facilitates the efficient clearing of offshore renminbi transactions in Luxembourg, achieved through the bank's direct cooperation with the People's Bank of China, China's central bank.