China’s new fund custodian rules

Abstract

Purpose To explain the key amendments to China’s rules governing fund custody business and highlight the implications for private fund managers. Design/methodology/approach The article analyses, from the perspective of private fund managers, the key amendments to the rules governing fund the custody business in China in terms of custody of fund assets, the fund settlement and clearing process, valuation, disclosure and reports, investment supervision, review of distributions and governance. Findings The revised rules governing the fund custody business allow private fund managers to use their global custodian in China locally and leave room for managers and custodians to agree on their responsibilities and risk allocation in the fund contract. Originality/value The article offers practical guidance on how private fund managers may contractually allocate responsibilities and risks between themselves and fund custodians in the fund contract.