Sou Hu Cai Jing·2025-08-19 16:19Core Viewpoint - The enthusiasm for fund custody licenses has significantly decreased, with only three institutions currently applying for such qualifications, indicating a shift from a broad accessibility to a focus on leading players in the securities industry [1][2][3]. Summary by Sections Current Applications and Trends - As of now, only three institutions are in line to apply for fund custody qualifications: Mongolian Merchants Bank, Guangzhou Bank, and Dongwu Securities, with the latter being the only remaining brokerage firm [2]. - Previously, there were seven brokerages, including Western Securities, Caixin Securities, and others, that had applied for fund custody qualifications, but six have withdrawn their applications within a year [2][3]. Regulatory Changes - The decline in applications is attributed to new regulatory measures that have raised the entry barriers for fund custody licenses, making it difficult for smaller brokerages to meet the requirements [3][4]. - The new regulations, set to be implemented in 2025, include stricter compliance and risk management standards, requiring applicants to have a regulatory rating of at least level 2 or A class and a minimum net asset requirement of 50 billion RMB for banks and 30 billion RMB for securities firms [4]. Market Dynamics - The fund custody business is undergoing a transformation from a focus on scale to a focus on quality, with resources increasingly concentrating among leading firms [3][5]. - The number of qualified institutions has been reported at 66, with a significant portion being larger brokerages, indicating a trend where smaller firms may struggle to compete [6]. Future Outlook - The market is expected to see increased concentration, with stronger firms gaining market share due to higher entry barriers and a more rigorous exit mechanism [7]. - The business model for fund custody is anticipated to evolve from basic services to high-value comprehensive services, emphasizing technology and risk management capabilities [7]. - A differentiated market structure is likely to emerge, where leading brokerages may establish specialized subsidiaries for refined operations, while smaller firms may pivot to providing outsourced services [7].