Custodian

Either (1) a bank, agent, trust company, or other organization responsible for safeguarding financial assets, or (2) the individual who oversees the mutual fund assets of a minor's custodial account.

Custodian
A brokerage or other financial institution that holds and manages a client's securities or other assets on his/her behalf. This reduces therisk of the client losing his/her assets or having them stolen. They are also available to the brokerage to sell at the client's demand. Like a bank, a custodian provides an investor a place to store assets with little risk. Brokerages normally require a fee for custodial services. See also: Safekeeping.

custodian
An organization, typically a commercial bank, that holds in custody and safekeeping someone else's assets. These assets may be cash, securities, or virtually anything of value.

Custodian. A custodian is legally responsible for ensuring that an item or person is safe
and secure. In investment terms, a custodian is the financial services company that maintains electronic records of financial assets or has physical possession of specific securities. The custodian's client may be another institution, such as a mutual fund, a corporation, or an individual. For example, with an individual retirement account (IRA), the custodian is the bank, brokerage firm, or other financial services company that holds your account. Similarly, the Depository Trust Company, a subsidiary of the Depository Trust and Clearing Corporation (DTCC), is the custodian of millions of stock certificates held in its vaults.

Definition of 'Custodian'
A financial institution that holds customers' securities for safekeeping so as to minimize the risk of their theft or loss. A custodian holds securities and other assets in electronic or physical form. Since they are responsible for the safety of assets and securities that may be worth hundreds of millions or even billions of dollars, custodians generally tend to be large and reputable firms.

Investopedia explains 'Custodian'

In addition to holding securities for safekeeping, most custodians also offer a variety of other services including account administration, transaction settlements, collection of dividends and interest payments, tax support and foreign exchange. The fees charged by custodians vary, depending on the services desired by the client. Many firms charge custody fees payable quarterly that are based on the aggregate value of the holdings.

The custody business provides a range of security services, including safekeeping and settlement, reporting, corporate actions, dividends collection and distribution, proxy voting, tax reclaim services, fund administration and providing market news and information. Foreign banks like HSBC, Citi, Deutsche and StanChart are the major players in the business. They bring their overseas relationships into the country. Compared to Indian players, foreign players have the reach. Most of the business comes from foreign institutional investors (FIIs) who have business relations with the international offices of these banks. Most of these players have strong domestic as well as international businesses. Though these players make only 2-3 basis points on custody fees, they earn largely from float, forex and a host of other transactions. With the boom in the capital market over the past few years, more FIIs are entering the market. The total number of FIIs registered so far in India is at 1,253 and the number of FII sub-accounts which are registered is at 3,720.

Custodian bank
A custodian bank, or simply custodian, is a specialized financial institution responsible for safeguarding a firm's or individual's financial assets and is not necessarily engaged in "traditional" commercial or consumer/retail banking such as mortgage or personal lending, branch banking, personal accounts, ATMsand so forth. The role of a custodian in such a case would be to:

hold in safekeeping assets/securities such as stocks, bonds, commodities such as precious metals and currency (cash), domestic and foreign arrange settlement of any purchases and sales and deliveries in/out of such securities and currency collect information on and income from such assets (dividends in the case of stocks/equities and coupons (interest payments) in the case of bonds) and administer related tax withholding documents and foreign tax reclamation administer voluntary and involuntary corporate actions on securities held such as stock dividends, splits, business combinations (mergers), tender offers,bond calls, etc. provide information on the securities and their issuers such as annual general meetings and related proxies maintain currency/cash bank accounts, effect deposits and withdrawals and manage other cash transactions perform foreign exchange transactions often perform additional services for particular clients such as mutual funds; examples include fund accounting, administration, legal, compliance and tax support services

Custodian banks are often referred to as global custodians if they safekeep assets for their clients in multiple jurisdictions around the world, using their own local branches or other local custodian banks with which they contract to be in their "global network" in each market to hold accounts for their respective clients. Assets held in such a manner are typically owned by larger institutional firms with a considerable amount of investments such as banks, insurance companies, mutual funds, hedge funds and pension funds.

Local custodian bank

In relation to American Depositary Receipts (ADRs), a local custodian bank (also known as a sub-custodian or agent bank) is a bank in a country outside the United States that holds the corresponding amount of shares of stock trading on the home stock market represented by an ADR trading in the U.S, with each multiple representing some multiple of the underlying foreign share. This multiple allows the ADRs to possess a price per share conventional for the US market (typically between $20 and $50 per share) even if the price of the foreign share is unconventional when converted to US dollars directly. This bank acts as custodian bank for the company that issues the ADRs in the U.S stock. [edit]Examples The following companies offer custodian bank services:

Asia Pacific Banking Investment Group Banco de Oro Unibank

Bank of America Bank of China (Hong Kong) Limited[1] Bank of Ireland Securities Services Bank of New York Mellon BBVA Compass BNP Paribas Securities Services Brown Brothers Harriman CIBC Mellon Citibank Comerica Bank Credit Suisse Deutsche Bank Estrategia Investimentos[2] Euroclear Fifth Third Bank Goldman Sachs HDFC Bank HSBC ICICI Bank Japan Trustee Services Bank JPMorgan Chase Kasbank N.V.[3] KeyBank Mitsubishi UFJ Trust and Banking Corporation Morgan Stanley Smith Barney NAB Northern Trust PT. Bank Central Asia, Tbk. RBC Dexia Societe Generale Securities Services Standard Bank Standard Chartered Bank State Bank of India State Street Bank and Trust Company The Kingdom Trust Company[4] The Master Trust Bank of Japan

U.S. Bank UBS UniCredit Union Bank N.A. Wells Fargo Bank

Mutual Fund Custodian

A Mutual Fund Custodian refers typically to a custodian bank or trust company (a special type of financial institution regulated like a "bank"), or similar financial institution responsible for holding and safeguarding the securities owned by a mutual fund. A mutual fund's custodian may also act as one or more service agents for the mutual fund such as being the fund accountant, administrator and/or transfer agent which maintains shareholder records and disburses periodic dividends or capital gains, if any, distributed by the fund. The vast majority of funds use a third party custodian as required by SEC regulation to avoid complex rules and requirements about self-custody. A mutual fund retirement account (IRA, SEP etc.) custodian, however, refers to the plan administrator and recordkeeper such as noted above, which may not necessarily be the same institution providing custody services to the investments of the overall fund.

What is difference between Custodian and depository?

Answer: - "Depository" is generally (or historically) used to talk about central institutions (nearly utilities) that register the initial deposit of securities on request of the issuer. CSDs are most of the time local organizations built to accommodate the clearing and settlement needs of local traditional exchanges. - "Custodian" describes a firm (generally banks) that holds securities on behalf of trading firms.

Patent synergies exist between both activities so the above mentioned distinction is blurred in a number of cases: - A custodian can offer initial depository services to issuers. This model is notably very efficient when the securities are not 100% freely transferable (basically not bearer shares) or when it comes to organising clearing and settlement in multiple currencies. - A well known European custodian owns several local CSDs and indifferently offers equivalent services via the different entities of the group. If I stick to the general picture I have just drawn, the custodians are the typical clients of CSDs. To sum up a (very simple) trade life cycle: 1- A trade is carried out on the exchange between two trading firms. 1'- The trade is notified by the exchange to countperparts. 2- It is sent to CCP/Clearing/Settlement agent(s) 2'- The trade is notified by CCP/Clearing