Global Custody Poll

THE NEW-AGE ALL-SINGING ALL-DANCING CUSTODIAN

This page depicts the latest Asiamoney Global Custody Poll, produced in 2004.

Banks are striving to adapt their offerings to keep pace with the fast-changing marketplace for custodial services, write Pauline Loong and Andrew Peck.

INTRODUCTION
Custody, as with most other services provided by banks these days, is constantly re-inventing itself to keep up with the fast-changing marketplace.

In times past, the custodian provided a rather straightforward, if not simple, service - that of safekeeping and settlement. Today, custody can come with all the bells and whistles. Major global custodians cover every possible spectrum of investing. From compliance management to derivatives clearing, they have to walk two steps ahead of highly aware, increasingly cautious institutional investors and fund managers. And as markets become more global, services are increasingly specialized. More complex regulatory requirements require the input of local sub-custodians, offering opportunities for the man on the ground who understands the rules of the game on his home patch.

In this our 6th custody poll, we have expanded our survey and introduced a new category - the services of the sub-custodian. For the Asiamoney sub-custody poll results, click on 'Surveys Calendar' (in the menu available at both the top and bottom of this page).

Responses to our poll reveal a brave new world in custodial services, with plenty of frills and a lot in added benefits for clients. Among these benefits: performance measurement, compliance monitoring, risk management and securities lending.

Such services help reduce the third-party costs clients must pay and help amplify their portfolio returns. What were once considered additional frills are now an expected part of core custodian service.

RESULTS
This year State Street wins the crown for best global custodian in Asia-Pacific, taking the top slot from Citibank, which won the Asiamoney poll for the previous three years.

One reason for State Street’s strong showing this year is the bigger weighting given to respondents with a bigger chunk of assets under management (see Methodology, via above link). The change in weighting reflects input from the industry after widespread consultation on polling methods that best reflect market realities.

METHODOLOGY
Asiamoney’s sixth Global Custody Poll was faxed to 600 operations managers and settlement managers at asset management firms, insurance companies, central banks and finance directors at large corporates around the Asia-Pacific region, including Japan and Australia. A total of 100 replies were received. The geographic breakdown of our respondents is as follows: Hong Kong: 29 Australia: 8 Singapore: 19 Taiwan: 21 Japan: 14 Others: 9

The questionnaire asked participants to rank the global custodians they have used. Three points were awarded to the banks with a first-place ranking, two for a second place and one for a third-place vote. The replies were weighted according to the total assets under investment globally:
0.25=Less than $100 million
0.5=Between $100 million and $500 million
1=Between $500 million and $1 billion
2=Between $1 billion and $5 billion
4=Greater than $5 billion

The service performance tables indicate what respondents think about the banks’ performance in particular services. Respondents are asked to rate the banks they voted for in three main areas:

(A) Core custody
Settlement, safekeeping, market coverage, speedy updates on market information, network management, corporate actions, fees, proxy voting, income collection, tax reclamation, client reporting, fund accounting, forex research/execution, business-continuity planning, system interface/ compatibility, cash management.

(B) Client service and communication
Account/relationship management, local/same time zone service, straight-through processing, customized solutions, experience/knowledge of personnel.

(C) Value-added services
Securities lending, compliance monitoring, funds administration, derivatives clearing, performance measurement, commission recapture, service delivery via the Internet, trade execution analysis, derivatives accounting.

A four-point scale is used, where four is "very satisfied" and one is "dissatisfied".

Show methodology

Overall Best Global Custodians
ASIA-PACIFIC REGION

Rank

Bank

Points

State Street