Global Custodian, Securities Service and Transaction Banking

What is a custodian?

A custodian in a financial market is an intermediary service firm that keeps securities for safekeeping and administers on behalf of third-party clients like mutual funds, AMCs, Hedge funds, and private equities firms. Custodial services are critical to the smooth operation of financial markets.

Custody as an industry originated with investors needing to keep securities certificates in a secure location, typically a bank with large vaults. As the financial markets have become more complex, custody has evolved into a trillion-dollar industry providing a range of information, accounting, and fund administration services.

Why are custodians essential?

In a world where assets are rising in value and distribution, the need for a safe mechanism to handle them is becoming increasingly important. Particularly now that digital, more intangible assets like bitcoin are rising. Banks are beginning to provide custodial services to address these trends. Custodian banks have played a significant role in their expansion since the early colonies in the United States as holders of the money required to create and grow the country.

According to the global custody services market analysis, the global elderly population is growing substantially and is likely to continue during the forecast period. By 2030, the population aged 65 and older in the United States is predicted to reach around 70 million, with similar trends noted in other regions of the world. This raises the demand for custodians to manage funds and provide securities services. The worldwide custody services market is predicted to increase at an 8.8% annual pace from $32.22 billion in 2020 to $49.10 billion in 2025. And a broad range of banks and finance companies require students to choose this career option. This training program is designed to give delegates detailed knowledge of various participants involved and custodian banks’ services.

List of top banks and companies that require candidates to have proficient knowledge about securities services:

· BNY Mellon

· State street

· JP Morgan

· Citi bank

· Northern Trust

· Morgan Stanley

Analytics and Tech companies

· Genpact

· Tiger Analytics

· Accenture

· TESCO

· Capgemini

· Standard Chartered

Topics covered in the course:

· The history and beginning of custodians

· The role of custodians

· Different participants in a transaction

. Issuers (Equity, debt, stock warrant, and derivatives)

. Investors (Retail and Institutional- Investment manager, hedge fund, investment company, and investment advisor)

. Broker-dealers (introducing broker, clearing broker, investment broker, and market makers)

. Institutional participants (Sub custodians, Central Securities depositories, and International CSDs)

· Selection process of a sub-custodian

· How do Custodians differ from Depositories?

· Core securities services

. Safekeeping and record-keeping services (Omnibus and segregated accounts)

. Asset servicing (processing taxes and income, corporate actions- dividends, stock splits, reverse stock splits, M&A, spin-off, rights issues, mandatory and voluntary corporate actions, valuing securities- stock and bond valuation- Income and market methods, and reporting services).

. Transaction processing and settlement (Delivery versus payment and Free of Payment)

. Banking services

. Ancillary services

. Agency securities lending services (What is the need to lend securities, and how does securities lending work? What might motivate someone to borrow security? Why not just purchase it?

. Foreign exchange services (Automated FX, passive currency overlay, and direct forex trading)

. Other administration services

. Fund accounting and administration

. Transfer agency services

. Collateral processing services

. Outsourcing services