Process objective
Ensure assets are protected

Process requirements
Attention should be paid to the risk associated with cash balances placed with the service provider.  Client cash accounts will usually be maintained on the service provider's records, but the balances may be held by the service provider (or another group company) or by a sub-custodian on its balance sheet - with credit exposure resting with the sub-custodian.  Reference should be made to the long-term credit rating (issued by a recognized credit rating agency) of the global and, if relevant, sub-custodians.  This rating helps in assessing the credit risk faced in leaving cash balances with the institution.  Consideration should be paid to moving material cash balances off the institution's balance sheet where there is the prospect of greater protection.

 


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