HONG KONG, Dec 12 (Reuters) - JPMorgan Chase is set to outsource the operations of its local custody business in Hong Kong and Taiwan with Citigroup, HSBC and Standard Chartered in the race for the mandate, two sources with knowledge of the matter said.

The Wall Street bank, the world's third-largest global custodian, is in the process of selecting another bank to take over the local custodian operations in Hong Kong and Taiwan, said the sources.

Financial details of the deal were not immediately known.

Local custody business takes care of transactions and runs the book for clients when they access certain market. Global custody, in contrast, manages cross-border investments with a vast network and holds the relationship with clients.

JPMorgan has around $520 billion worth of client assets under custody (AUC) as a local custodian in those two North Asian markets, said a third source with direct knowledge of the matter.

The bank will continue to provide global custody services in those two markets.

The bank is aiming to complete the transition in Hong Kong and Taiwan to another bank by the end of next year, the third source said.

That move would mark its exit from the local custodian business in the Asia Pacific region, said the first two sources.

JPMorgan in recent years exited lower-margin local custodian business from other markets in Asia Pacific including Australia and South Korea. Falling custodian assets had made it less lucrative, the two sources said.

All sources declined to be named as they were not authorised to speak to media.

Spokespersons for JPMorgan, HSBC, Citi, and Standard Chartered declined to comment. (Reporting by Selena Li; Editing by Sumeet Chatterjee and Stephen Coates)