Domestic

Guotai names State Street as custodian, service provider

(Xinhua)
Updated: 2010-06-17 16:17

HONG KONG: US-based State Street Corporation, one of the world's leading providers of financial services to institutional investors, said on Wednesday that it was appointed as global custodian and trading service provider to the Guotai Nasdaq-100 Index Fund, which is managed by leading Chinese securities firm Guotai.

The Guotai Nasdaq-100 Index Fund was the first fund in China's mainland to track the performance of an overseas index. China Construction Bank, the country's third largest commercial bank, would act as local custodian for the fund.

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State Street said in a statement that it would offer a range of integrated investment servicing solutions to the fund, including global custody, fund accounting, investment compliance reporting services, foreign exchange and portfolio research and trading solutions.

"This opportunity is historic for Chinese investors to invest in Nasdaq-listed companies," said Sau Kwan, managing director and senior vice president of State Street in Hong Kong.

The Guotai Nasdaq-100 index opened for subscription on March 22, becoming the first index-linked financial product to offer Chinese investors access to stocks listed on an overseas exchange.

Investments will be conducted through the Qualified Domestic Institutional Investor (QDII) program, through which Chinese investors can invest in foreign capital markets.

Guotai Asset Management received a $700 million investment quota under QDII earlier this year.

The Guotai NASDAQ-100 Index would help Chinese investors access to component stocks of the Nasdaq-100, to an exchange traded fund of that index, and to money market instruments and other approved financial instruments.

The Nasdaq-100 comprises many of the world's largest non- financial stocks. Guotai Asset Management has an exclusive licensing agreement with Nasdaq-OMX Group to use the Nasdaq-100 Index in development of financial products in China.

State Street Corporation has been actively involving in China's financial landscape since 1997, working with many leading financial institutions including China Construction Bank for which it acts as a global partner serving the QDII sector.

In 2005 it established its first presence on China's mainland when it opened a representative office in Beijing.

With $19 trillion in assets under custody and administration and $1.9 trillion in assets under management by the end of March this year, State Street operates in 25 countries and more than 100 geographic markets worldwide, according to the statement.