Custodian

A custodian is a person that cleans and maintains large buildings, and in this respect is synonomous with caretaker. Examples include a school custodian or a custodian for any large building or set of buildings.

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As a legal term, custodian refers to the person appointed to manage and dispense funds for a child without constricting court supervision and accounting requirements.

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As a financial term, custodian refers to a bank, agent, or other organization responsible for safeguarding a firm's or individual's financial assets. The role of a custodian in such a case would be the following: to hold in safekeeping assets such as equities and bonds, arrange settlement of any purchases and sales of such securities, collect information on and income from such assets (dividends in the case of equities and interest in the case of bonds), provide information on the underlying companies and their annual general meetings, manage cash transactions, perform foreign exchange transactions where required and provide regular reporting on all their activities to their clients. Custodian banks are often referred to as 'Global Custodians' if they hold assets for their clients in multiple jurisdictions around the world, using their own local branches or other local custodian banks in each market to hold accounts for their underlying clients. Assets held in such a manner are typically owned by pension funds.

Related Topics:
Equities - Bonds - Dividend

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