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Asset Management Services
  • (2013-08-07)

      On August 15th, 2002, registration and clearing service of open-end fund was introduced. Over more than a decade, the CSDC has made considerable progress in its asset management services. With continuous expansion of the business scope, it has gradually developed three major sections, which are registration and clearing, assets custody and the central data exchange platform and industry standards. With an increasing variety of services offered, CSDC can provide a complete set of back-office services for funds, securities companies’ asset management products, and wealth investment products of banks.
      1. TA Service
      In August 2002, based on the needs of open-end fund market, CSDC introduced a set of open-end fund depository and clearing systems, which relies on existing securities account resources, the asset settlement systems, and the network communication facilities of CSDC Shanghai and Shenzhen Branch, to provide managers of funds and wealth investment products with single or combined services for depository, clearing, billing, communication, and other modules. The system consists of the transfer agency (abbreviated as "TA") subsystem, the asset settlement subsystem, and the communication subsystem, which together have comprehensive service functions and can provide the relevant participants with subscription, purchase, and redemption of the funds, as well as related depository, clearing and settlement, dividends and other equity distributions, customer service, and other services.
      CSDC has established a "Smart-Card" fund account for investors and provides inquiries into the details of the relevant account, which not only eliminates the need for investors to repeatedly open accounts and the hassle of managing numerous fund accounts, but also effectively protects the legitimate rights and interests of investors.
      CSDC provides a centralized and guaranteed security netting settlement service for funds and sales agents. Each participant only needs to manage one settlement position with CSDC on a daily basis to achieve safety and efficiency. 

      The communication subsystem of the CSDC’s fund system uses a "single point connection" mode to connect with participants, avoiding multiple networking between participants, and greatly reducing the operational costs of participants. Standardized transaction processing rules and the business data interface are conducive to the daily operation of participants and standardized development of future business. In addition, because of relying on the existing securities clearing and settlement communication network, data transmission efficiency and security have also been effectively guaranteed.
      CSDC has developed and published a series of business rules, the most fundamental of which is the Guidelines of China Securities Depository and Clearing Co., Ltd. on Depository and Clearing Business of Open-End Securities Investment Funds and Securities Companies’ Asset Management Products
      2. Asset Custody Service
      In May 2011, in coordination with securities companies’ innovative piloting of cash management products and taking it as an opportunity, upon approval by CSRC, CSDC provided a custody service for the cash management products of securities companies. On November 8, CSDC formally launched an assets custody business.
      The asset custody service provided by CSDC covers five major aspects as follows:
      Firstly, assets safekeeping. CSDC is responsible for the safekeeping of cash and securities of products under custody. CSDC establishes a separate account and book-entry for each product under custody, keeps strict separation of assets under custody and self-owned assets and ensures that account records match the facts and that relevant book-entryis consistent.
      Secondly, asset clearing and settlement service. CSDC is responsible for the sales of product under custody, the clearing and settlement of investment capital and related payment, etc to ensure that capital clearing and settlement is safe, accurate and efficient.
      Thirdly, accounting and asset evaluation service. CSDC plays a crosscheck role by conducting the financial accounting and net asset value (NAV) calculation for the product independently from and in parallel with the principal financial accountant (usually the asset managers).
      Fourthly, investment supervision. According to the relevant laws and regulations as well as contractual provisions of products under custody, the custodian is responsible for supervising and verifying the managers’ investment operations of relevant products in real time.
      Fifthly, information disclosure. According to the relevant laws and regulations as well as contractual provisions of products under custody, the custodian is responsible for reviewing the product-related information disclosed by the managers and issuing relevant custodian reports on a regular basis.
      The asset custody service provided by CSDC has some advantages as follows:
      Firstly, credibility. CSDC, as the unique centralized securities registration, clearing and settlement institution established in accordance with the Securities Law, is a non-profit service organization, with neutral market position and strong credibility.
      Secondly, professionalism. CSDC has been committed to securities registration, custody, settlement and other capital market back-office services for more than twenty years and has a deeper understanding of the asset custody business. The custody business complements CSDC’s registration and settlement as well as the funds TA and other businesses, to provide a better overall back-office solution.
      Thirdly, efficiency. CSDC’s custody business makes full use of its rich experience in the construction of the securities registration, clearing and settlement system, business operations and other aspects, providing high-quality and efficient "one-stop" custody services for products under custody.
      Fourthly, safety. CSDC has formed a set of effective risk management concepts and management measures in its long history of securities registration and settlement services, which are applied directly to the custody service to adequately guarantee the security of assets under custody.
      Fifthly, cost-efficiency. CSDC adheres to the philosophy of supporting industry innovation and development and insists on its guaranteed operating strategy to provide various assets custody services at a lower cost.
      3. Funds’ Central Data Exchange Platform Service
      According to the deployment of CSRC, CSDC launched the funds’ central data exchange platform at the end of September 2011. By the end of 2012, all transfer agencies and funds sales institutions in the funds industry have gained complete access to the work platform. Next, CSDC will continue to do access work for new transfer agencies, funds sales organizations and securities companies,insurance assets management companies, private equity fund management institutions and other units that have obtained the qualification of funds raised in public.
      As the infrastructure of fund industry, platform services are mainly reflected in three aspects:
      Firstly, promoting the development of the industry. The platform provides unified standardization, one-line access, interconnection and other services, which help improve overall efficiency, reduce costs for the industry, and promote the development of industry standardization.
      Secondly, mitigating risks. The platform provides centralized operation and maintenance services for funds trading data transfers, which help reduce operational risks in the industry; the platform can achieve a centralized backup of the core data in the fund industry, which helps protect the security of the information in the industry.
      Thirdly, protecting the interests of investors. Since the data flowing through the platform is real and effective production date, which can effectively prevent late trading by appropriate monitoring, trading at selected times, and other actions, in order to protect the interests of investors.


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