Depository and Custodian
Posted by rickytse on 六月 13, 2009
Custodian is an organization that holds securities and(usually) cash on it’s client’s behalf; and may effect settlement of trades on its client’s behalf.
Central securities depository (CSD) is the ultimate storage location of securities within a financial centre, usually in book entry form; settlement of trades may be provided as an additional service.
International CSD handles international securities. Only 2 organizations are recognized as ICSDs, namely Clearsteam (Luxemborg) and Eurocleatr (Brussels).
For it’s safe custody business the STO Securities Trading Organization may choose to maintain 2 accounts at it’s custodian within a specific market. Resident of certain countries has 1 rate (treaty rate) while other client has higher rate (non-treaty rate).
Reconcilation process is designed to prove that it’s book & records are accurate, through the comparison with
- trading system: trades and trade book position (ownership position)
- custodian: unsettled trades, settled trades, settled position. (location position)
