Global Trustee and Fiduciary Services News and Views Issue 50

Prime, Futures and Securities Services | XXXXXX 92 Short term Medium term Long term Time frame • Next 1 — 2 years • Next 2 — 3 years • Next 3 — 5 years Target/objective • First-mover advantage • Brand building • Grow onshore business • Gain access to cross-border schemes • Full AM license • Leading position in cross-border investing Potential business opportunities (Subject to business objectives) • Set up onshore IA WFOE. • Begin to establish local research. • Partner with local institutional investors, distributors, service providers. • Develop local products to meet local investor needs. • Register with AMAC. • Provide investment advisory services to parent company. • Build brand and relationships onshore. • Apply for AMAC PFM license when ready to launch product. • Aim to gain access to receive money from inbound QFII and RQFII. • Access cross-border schemes such as Stock Connect, QDII, MRF. • Develop own sales team and distribution. • Prepare Application for local mutual fund license (FMC). • Apply for Fund Management Company (FMC) license. • Access pilot cross-border futures, commodities and FX investment schemes. • Access QDII/RQDII/QDII2 schemes, providing global asset allocation to onshore institutions and individuals. Probable staffing • 2-3 key staff • 10-15, incl. 3 key staff • 15+, incl. 3 key staff Looking at these from a timeframe perspective might also give a different impression of what can be achieved. 1 2 3 Route 1 • Wholly Foreign Owned Enterprise (WFOE) • IA, PFM (AML) or FMC License? • Need for staffing, research and eventual gearing-up • The main benefit will be to offer a direct sale of products and services within China to all client types Route 2 • Stay in HK, flying visits • More economic, possibly miss bigger client opportunities • Risk for future mandates, if requirement for WFOE License imposed Route 3 • Partnership or Joint Venture • Difficult to select the right partners • Aligning the ambitions of both parties Route choices for market entry