JP Morgan announced in late 2016 that it was looking to outsource its local custody business in Hong Kong and Taiwan. On July 22, according to the Central Clearing System and Depository (CCASS) records, there was a large transfer of shares held by JP Morgan, with nearly 1400 shares involved, worth HK$68bn. On the same day, HSBC (00005) saw a large increase in its holdings, indicating that it had received a large portion of the shares that JP Morgan had previously held.
According to the CCASS records, JP Morgan sold off 1399 shares, worth HK$679.7bn. The shares sold off included Tencent (00700), Alibaba (09988), UOB (01299) and others. The total value of JP Morgan's sales of Tencent shares was HK$133.2bn, and the total value of its sales of Alibaba shares was HK$4.28bn.
On the same day, 1326 shares were transferred into HSBC, worth HK$67.42bn. The number of shares transferred was largely consistent with the number of shares transferred from JP Morgan, indicating that it was likely a transfer between custodians.
JP Morgan said in March that it planned to outsource its local custody business in Hong Kong to HSBC and its local business in Taiwan to State Street, with the aim of completing the process before the end of the year.
Local custody refers to the handling of transactions and provision of record-keeping services when client funds enter a market. Global custody involves managing cross-border investments through a large network and maintaining relationships with clients.