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Safekeeping of Trust Assets

I. Product Overview
Safekeeping of trust assets refers to the financial service including safe custody of trust assets provided by ICBC as a custodian bank under the entrustment of a trust company, with rendering related services such as clearing, valuation, accounting, investment supervision and information reporting.
Third-party safekeeping service serves as a long-term mechanism for promoting steady development of trust business. The introduction of the third-party safekeeping service can separate three “rights” (i.e. ownership, management rights and supervisory rights) in connection with trust assets, effectively improve trust governance structure, contribute to the enhancement of credibility of trust products and enhance the trust of the public towards trust companies and their products. It has been fully proved during the development course of securities investment fund industry that the safekeeping mechanism plays a quite important role in the enhancement of industry credibility. In addition, the introduction of the third-party safekeeping service can also improve the efficiency of trust operation, reduce operating costs, realize transparent information about trust projects, and help achieve standardized internal control, regular external supervision, segregated internal and external risks and prompt risk warning for trust business.
Since the rendering of safekeeping service for trust assets under the approval of PBC in 2002, ICBC has accumulated abundant experience in this respect. Investment can be made in different areas and safekeeping services can be provided for different types of trust products. Currently, the trust products under safekeeping have included different investment and innovative trust products, involving currency, project, equity, bonds, stock, bills, futures, gold, commodity, foreign currency and artwork. Besides, integrated bank-trust cooperation can be carried out with various trust companies.

II. Target Customers
Trust companies or trust investment companies formally registered with CBRC.

III. Scope of Services
i. Safekeeping of trust assets
Open and management separate fund account and various securities accounts for trust scheme;
Provide safekeeping service for trust assets;
Ensure the separation of management and holding of trust assets.
ii. Accounting of trust interests
Apply complete and standardized accounting to the trust assets under safekeeping;
Prepare accounting statements and check them with trust companies on a periodic basis, to ensure standardization and correctness of accounting records;
Keep safekeeping records, books, reports and other related materials for trust assets.
iii. Fund receipt and payment
Confirm and execute the instructions for managing or using trust assets, and review and handle the settlement and clearing of trust funds and assets.
iv. Supervision on trust investment
Supervise and verify the management mode, scope of use, objects, portfolio proportion and investment restrictions for trust assets, and supervise whether there is any behaviour prohibited by relevant laws, regulations, documents and contracts in the management and operation of trust assets.
v. Valuation of trust assets
Valuate the market value of trust assets under safekeeping on a periodic basis, and check valuation results with trust companies.
vi. Periodic information disclosure
Issue financial reports and safekeeping reports on a periodic basis.
Verify the disclosed information which should be reviewed by custodian during the management and use of trust assets.
vii. Verification of plans for expense payment and trust interest allocation
Supervise and verify the expenses in connection with trust schemes and calculation of trust interests, and pay relevant expenses and interests.
viii. Collection and payment
Provide fund collection and income payment services in the subscription for trust schemes.
ix. Performance evaluation
Provide the clients of trust schemes with comprehensive performance evaluation of managers, whole market manager analysis and manager style analysis;
Provide comprehensive analysis including property market analysis for trust schemes, calculation of return on investment, relative performance analysis, risk measurement, performance analysis, performance attribution analysis and industry ranking;
Monitor trust scheme manager risks and public opinions.

IV. Advantages
i. ICBC, as the largest domestic commercial bank, enjoys a good social reputation, which greatly enhances the credibility of its trust and safekeeping products.
ii. Its sound service network, abundant customer resources, extensive high-end customer groups and wide-spread trust agency services contribute to the promotion of trust companies and related products.
iii. ICBC always maintains a leading position in terms of market share of custody business. By virtue of its rich experience in the safekeeping of trust assets, ICBC can provide efficient, professional and integrated one-stop safekeeping services for various traditional and innovative trust products, including convenient fund receipt and payment service for trust schemes, and abundant and flexible bank-trust products.
iv. For the purpose of facilitating related procedures, trust companies can directly contact tier-one branches of ICBC all over the country, to apply for safekeeping of trust assets and localized services.

V. Business Guide
i. Business contact: trust investment companies which have demands for safekeeping of trust assets can contact the Asset Custody Department of the Head Office or local branches of ICBC.
ii. Signing of agreement: an appropriate safekeeping plan will be designed and a safekeeping agreement will be signed based on mutual communication and customer’s demands.
iii. Opening of account: fund accounts and securities accounts for trust schemes will be opened as required by regulatory authorities.
iv. Safekeeping operation: services including safekeeping of trust assets, accounting, asset valuation, clearing and delivery will be provided according to safekeeping agreement, and investment and operation of trust funds will be supervised, with issue of periodic reports.

VI. Contact Information
If you would like to apply for any service, please contact local branch or sub-branch of ICBC or the Entrusted Asset Division I of Asset Custody Department under the Head Office of ICBC.
Contact person(s): Zhao Zhiguo
Tel: (8610)66105771
Fax: (8610)66105769
E-MAIL: zhiguo.zhao@icbc.com.cn