Bank of China launched its cross-border custody service product recently. As the first domestic bank offering such service in China, Bank of China shows that Chinese banks are capable of providing the cross-border custody service by themselves.

In order to adapt to the growth of cross-border investment and improve the custody service level, Bank of China independently developed the Global Custody Service (GCS) system that was put into operation outside China in June, 2011. Adopting the world-class assets custody ideology and the advanced IT technology, GCS has all the core custody service functions. On July 1, the first QDII custody was successfully migrated into the new system, realizing real-time transmission of transaction instructions between the custodian banks in Beijing, New York and Hong Kong. According to the person in charge from the Custodian Department, Bank of China will develop more business modules under GCS to meet the demand for the worldwide customers to increase their return on investment.

Although Chinese banks began the custody business in 1998, they could not provide cross-border custody service. The cross-border investment assets of domestic institutions and enterprises were all under the custody of foreign banks. In recent years, domestic banks launched 1+1 custody model. Under this model, domestic banks should sign the cross-border custody agreement with their customers, and assign an overseas foreign bank to provide the custody service outside China. The launch of the cross-border custody service by Bank of China will change the situation, thus it is a critical breakthrough for the custody business in China. In the future, Bank of China will rely on its global network across more than 30 countries to provide the cross-border custody services for its customers.

Source:boc