China has allowed branches of foreign banks to provide fund custodian services in the country as part of its continuous financial opening-up efforts, according to the country's top financial regulators on Friday.

The China Securities Regulatory Commission and the China Banking and Insurance Regulatory Commission said on Friday they have recently revised the regulation over custodian services of investment funds and abolished the restriction stipulating the custodian banks must be legal entities. 

Fund custodian services mainly refer to holding and safeguarding securities owned within a fund, to reduce the risk of fraud.

Branches of foreign banks are allowed to apply for the license of fund custodian services, the new regulation said, while specifying the responsibilities and qualifications of head offices of the foreign banks. 

The move complies with the country's agenda of financial sector opening-up as well as the phase-one China-US economic and trade agreement, the CSRC said in a statement.

The revised regulation also strengthened regulatory arrangements over custodian services and streamlined the procedures of applying for custodian licenses.