Overview
The Custody of Collective Investment Scheme (CIS) Managed by Securities Company is a type of service where the securities company acts as the investment manager and ABC as the custodian of particular assets under CIS to safeguard the interest of the investor in accordance with the contract signed by the investor, the securities company and ABC.
Features
By introducing the third-party custodian (usually a bank) into the CIS, this service enables the division between investment management and asset safekeeping, facilitates the protection of assets under the management and the supervision over investment activities of the securities company, and therefore safeguards the interest of customers. The custodian is responsible for safekeeping of assets, accounting, funds clearing, investment supervision and information disclosure.
With abundant expertise and a talented team of custodian services, ABC has maintained a leading position in the field of CIS. Cases from the past include GuangFa CIS II, the first CIS managed by the securities company, and various types of CISs (e.g. Dong-Fang-Hong I).
Procedures
1. The securities company signs the CIS Custody Agreement with ABC.
2. The securities company sells the CIS once it has been approved by relevant authorities, and the investors sign the asset management contract and participate in the CIS.
3. The placement of the CIS is closed and the proceeds are credited to the separate custodian account for CIS.
4. ABC performs the safekeeping of assets, funds clearing, accounting, investment supervision and information disclosure during the term of the CIS.
Tips
As a custodian of the CIS, managed by the securities company, ABC performs the custodian obligations under the custody contract but does not warrant or guarantee the safety of or any prospective returns on the principal.
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