Global Finance honors the often-hidden providers of the specialized services that make cross-border investing possible.
As institutional investors increasingly venture into foreign markets to obtain diversification and higher returns, they rely on global custodians for a wide range of securities services. The global custodians, in turn, are beholden to local providers of specialized services, known as sub-custodians, to handle the clearing, settlement, record-keeping and tax requirements that vary from one market to another.
Often invisible to end-users of custody services, sub-custodians form the bedrock of the custody business. They have the knowledge of local markets, as well as experienced staff and effective systems, to make the process of global investing run smoothly.
In our fifth annual survey of the Best Sub-Custodians, Global Finance selected the institutions in nine regions and 46 countries that reliably provide the best custody services. HSBC, which calls itself the worlds local bank, won a total of 21 awards, far more than any other bank. The sub-custody business is increasingly consolidating in the hands of fewer providers with the scale and technology to compete and the experience to add value for investors.
Global Finance editors and reporters, with input from expert sources, selected the winners based on a series of objective and subjective criteria that included customer relations, quality of service, competitive pricing, smooth handling of exception items, technology platforms, post-settlement operations, backup systems and knowledge of local regulations and practices.
In selecting the winners, we also considered market share, commitment to the business, experience and number of staff, innovation, direct links to depositories, financial soundness and safety, and range of assets serviced. The winners are both technicians and diplomats: They keep markets operating smoothly, and they promote the interests of foreign investors to local regulators and officials.