Citigroup’s China Expansion Plan Delayed by US Regulators

Citigroup Inc.’s expansion plan in China has hit a roadblock with US regulators after the Federal Reserve imposed a penalty on the bank for its data management and risk controls, according to people familiar with the matter.

The bank is facing delays in setting up a standalone securities firm because it hasn’t yet received a clearance letter from the Fed verifying its regulatory standing, which is required by Chinese authorities. Citi was instructed to resolve its data management problems at home, after being hit with a combined $136 million in fines in July, the people said, asking not to be identified because the matter is private.