GLOBAL CUSTODY: A DEFINITION
processing cross-border securities trades, keeping financial assets safe and servicing the associated portfolios.WHICH FINANCIAL ASSETS ARE INVOLVED?
Custodians hold a range of assets on behalf of their customers. These include equities, government bonds, corporate bonds, other debt instruments, mutual fund investments, warrants and derivatives.
WHO USES GLOBAL CUSTODY SERVICES?
Institutional investors, money managers and broker/dealers are among those who rely on custodians and other market participants for the efficient handling of their worldwide securities portfolios.
WHO PROVIDES GLOBAL CUSTODY SERVICES?
The market is dominated by a small number of key players - comprising major banks and specialist providers. Check out the Service Providers listings from our home page.
WHAT ARE THE KEY GLOBAL CUSTODY SERVICES?
The traditional core service provided by a global custodian is to effect settlement of trades (that is, completion of a transaction, wherein the seller transfers securities or financial instruments to the buyer and the buyer transfers money to the seller), to provide safekeeping of the assets on behalf of clients and to the service the assets, including:
- collection of income arising from the portfolios (dividends and interest payable)
- application of entitlements to reduced rates of withholding tax at source and reclaiming withheld taxes after-the-fact
- notification and dealing with corporate actions (such as bonus issues, rights issues and takeovers).
For more details, see our Buyer's Guide and Service Matrix.
WHAT IS THE HISTORY OF THE GLOBAL CUSTODY INDUSTRY?
Check out our brief history of global custody.