Enterprise Annuity Custody

Overview
Enterprise Annuity Custody is a service where ABC, at the request of the enterprise as the trustee, enters into an Enterprise Annuity Custody Contract with the trustee and maintains custody of the enterprise annuity on behalf of the trustor and the beneficiary under contractual terms and conditions.

Features
This service maintains the enterprise annuity in safe custody, provide clearing and accounting of enterprise annuity, and deliver regular custody reports and financial reports to the trustee and other relevant regulators.

Target Customers
Enterprises that have established enterprise annuity programs or enterprise annuity trustees (including enterprise annuity councils and enterprise annuity trustees with a corporate status).

Basic Services
1. Asset custody
Set up separate accounts for individual enterprise annuity to provide separate management and ensure independence of the accounts. Open, rename, or terminate enterprise annuity fund accounts, keep custody of and use seals and important documents relating to enterprise annuity.

2. Clearing of funds
Complete clearing of funds with China Securities Depository and Clearing Corporation Limited or counterparties to provide timeliness, safety and accuracy.
3. Accounting and valuation
Calculate the net asset value and prepare financial statements of enterprise annuity for an accurate view of its operations, and check upon the accounts and statements with the investment manager, in a timely manner, to provide an objective, accurate net asset value of enterprise annuity under valuation principles.

4. Benefits payment
Under the instructions of the trustee, examine the benefit calculations provided by the account manager, transfer funds payable to the designated account, and give timely notice of completed payment to the trustee and the account manager. 

5. Investment oversight
After receiving relative instructions to trade, review the genuineness, legality and completeness of the instructions, supervise the investment range, proportions, and behaviors and expenditure of enterprise annuity, and then implement the instructions. In the event of a refusal to execute instructions, immediately notify the investment manager, and report forthwith to the trustee and regulatory authorities if the investment manager is found to act in violation of laws, regulations or contract.

6. Reporting
Regularly deliver accounting statements to the trustee, provide custody reports and financial reports on enterprise annuity and discharge the duty of information reporting pursuant to relevant provisions.

Value-added Services
1. Advice on enterprise annuity planning
ABC provides advisory services to facilitate our customers' ability to plan enterprise annuity.

2. Filing of enterprise annuity program and contract
ABC assists our customers in preparing documents required for filing, as well as communicates and liaises with labor and social security authorities.

3. Selection of relevant professionals
ABC assists our customers in selecting only the trustees, investment managers and account managers of enterprise annuity who demonstrate good reputation, and provide full and competent services, and utmost professionalism.

4. Information services
ABC provides our customers with information services tailored to their needs, including information on national pension policies, enterprise annuity markets, enterprise annuity management institutions, and key industry developments.

5. Risk management and performance assessment
With a sound risk control regime as well as advanced and effective systems of risk management and performance assessment, ABC achieves automatic management of enterprise annuity investment data, provides the trustee and regulators with reports on risk analysis and performance assessment to identify the investment risks promptly,  evaluate investment performance of the assets under management, and analyzes risk sources and performance.

Strengths
1. Proven experience in custody
As one of the first Chinese commercial banks licensed to have custody of securities investment funds, ABC has maintained a record of zero-error custody services for ten years.

In 2004, ABC was honored as one of the "Best Custodian Banks" by the U.K. Global Custodian magazine. 

In May 2007, ABC was certified to SAS70 after passing the risk management and internal control effectiveness test and evaluation.

2. Diverse custody products
ABC offers a full range of custody products covering all assets available in markets, including closed-end funds, open-end funds, insurance funds, special asset management programs, trust schemes, collective wealth management products, QFII, QDII, private equity, credit asset securitization, and enterprise annuity.

3. Large scale of custody
Relying on the fast-growing capital market and asset management sector, ABC has gained remarkable results in both size and profit of custody business. By the end of December 2009, ABC had held nearly RMB1.3 trillion of assets in its custody.
4. Strict risk control
ABC has advanced risk management techniques, multi-tiered systems of internal controls, complete rules and procedures, and sound business processes.

5. Advanced technical systems
ABC has full-fledged integrated information platform and core system for Enterprise Annuity Custody with advanced technical architecture and well-defined functions, thus providing high flexibility and scalability.
6. Comprehensive, high-quality local services
ABC has presence in over 90% of county towns and more than 20% of countryside towns across China. All our outlets are interconnected to provide considerate, convenient and secure local services. 

Procedures
1. Enter into the custody service agreement with the trustee.
2. Open bank account and securities account relating to enterprise annuity.
3. Collect enterprise annuity fees and allocate investment quota.
4. Pay and transfer enterprise annuity benefits.
5. Provide clearing services for enterprise annuity.
6. Provide accounting for enterprise annuity.
7. Provide total-process oversight of enterprise annuity operations.
8. Issue custody reports to the trustee and regulators.
9. Provide value-added services.