China Tells Custodian Banks and Brokers to Step Up Oversight of Private Funds

As China’s financial regulators seek to rein in risks in the country’s $3 trillion privately offered funds market, they are stepping up oversight of the banks and securities firms that act as custodians as well as the companies that manage the assets.

Custodians — regulated financial institutions whose main task is to safeguard and protect investors’ assets to prevent fraud — are being given more responsibility for supervising private funds.