Custodian

Key Highlights

• A custodian is a financial institution- such as a bank, trust company, or specialized firm- that holds and safeguards assets (like securities, cash, or other valuables) on behalf of individuals, corporations, or institutional investors.

• The custodian is responsible for the safekeeping, administration, and reporting of these assets, ensuring their security and proper management.

What is Custodian?

A custodian is a financial institution- such as a bank, trust company, or specialized firm- that holds and safeguards assets (like securities, cash, or other valuables) on behalf of individuals, corporations, or institutional investors. The custodian is responsible for the safekeeping, administration, and reporting of these assets, ensuring their security and proper management.

Key Responsibilities

• Safekeeping: They guard your investments- whether physical or digital- from theft, loss, or damage.

• Recordkeeping: They keep detailed records of what you own and any transactions, like buying or selling.

• Settlement: They make sure trades go smoothly by transferring securities and money between the right parties.

• Reporting: They give you regular reports about your assets and what’s happening with them.

Types of Custodians

• Bank Custodians: Big banks that offer safekeeping as part of their services.

• Trust Companies: Firms focused on managing assets, often for things like trusts or pensions.

• Specialized Custodians: Companies that only do custodian services, usually for big players like mutual funds or hedge funds.

Why are Custodians Important?

• Asset Protection: They keep your assets secure from fraud or unauthorized access.

• Regulatory Compliance: They help you stay compliant with financial laws and regulations.