For a fee, the institution collects dividends, interest, and proceeds from security sales and disburses funds according to the customer's written instructions. Custodians—who hold responsibility for assets in custody—have existed for millennia, since the first money lenders in the temples of early civilisations took deposits of gold minas and shekels from passing merchants. These ancient guardians relied entirely on their reputation to acquire business.
Custodians that were familiar with local economic conditions and unswayed by the temptation of bribes or collusion won credibility within the community, and were trusted as a safe pair of hands for storing funds. Trust, above money, was the real currency of custodianship, and word and reputation mattered more than nearly everything else. Maintaining this reputation remained critical for custodians through the centuries, as generation after generation turned to the same firms because they expected them to act honestly and honour their obligations.
We have specialists by market who monitor subcustodian performance and track outstanding reclaims. Corporate events include a variety of services including proactive client response management, investigation into unsolicited instructions, mandatory and voluntary support, courtesy reminders and follow-up through our online system or SWIFT.
Our service supports timely posting of all transactions and proactive client response management. For proxy voting, BNY Mellon leverages Broadridge Financial Solutions for highly automated proxy ballot distribution and vote collection processing. As part of our solution, we provide notification of known litigations to clients for their downstream process.
The comprehensive tax services include proactive tax treaty monitoring, automated relief at source, tax documentation completion support, and automated documentation tracking and renewal system. Our service reduces manual processing and gives you the ability to actively track reclaims that are outstanding due to lack of documentation.
Our documentation and account maintenance services provide clients with expertise in opening accounts in complex global markets. These functions include monitoring market changes, tracking tool for expired documents, and a facilitation of document legalization process to achieve timely market openings.
For most, the combined impact of falling revenues and rising costs alongside rapid and widespread technology innovation, demands greater business model flexibility. Improve the oversight, security and management of your funds by integrating our Custody, Transfer Agency, and Fund Accounting services. Portfolio Management. Saving For College.
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Key Takeaways A custodian is a bank that holds financial assets for safekeeping to minimize the risk of theft or loss. Investment advisors are required to arrange for a custodian for assets they manage for their clients. In modern times, these assets may be stored in physical or electronic form. Article Sources. Investopedia requires writers to use primary sources to support their work.
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The role of a custodian in processing securities transactions is typically a post-trade role. Thus, custodians no longer safeguard physical securities certificates in their vaults, but rather, a custodian must confirm that its book-entry credits at a CSD or ICSD are equivalent to the book-entry credits held by its clients in their securities accounts on the books of the custodian.
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