Northern Trust Becomes Global Custodian For China's Social Security Fund

By Tim Clark, Wall Street & Technology

Northern Trust has been selected to provide global custody, investment mandate compliance monitoring and performance measurement services to China's multibillion dollar National Social Security Fund (NSSF) - the first institutional retirement fund in China to invest overseas.The NSSF was established in September 2000 to supplement anticipated shortfalls in national and provincial pension programs in China. The NSSF was one of the first institutional funds in China to have received Qualified Domestic Institutional Investor (QDII) status from the State Council in 2004, allowing it to invest in overseas equities markets with designated foreign currencies.

Northern Trust has been working with the NSSF since 2002 on a consulting basis providing advice on setting up an internal infrastructure to support its overseas investment programs. The firm will provide the NSSF a comprehensive package of trade-dated, fully accrued, multicurrency international portfolio accounting reports in Chinese. Northern Trust specifically developed this Chinese language capability to support the NSSF and other clients in China.

"Working with institutional investors in mainland China is an integral part of Northern Trust's overall growth strategy for the Asia-Pacific region," said Frederick Waddell, president of Northern Trust, in a release. "Over the past three years, we have doubled our custody assets in Asia through organic growth. We are poised for the next phase of rapid growth in Asia to capitalize on the opportunities around the region."

As of June 30, 2006, Northern Trust had assets under custody of $3.2 trillion, and assets under investment management of $640 billion.