The securities custody business (also effect administrative or shortly custody business ; English Custody ) is in the Banking , a banking business that deals with the custody and management of securities concerned for others.
In Germany, the securities custody business comprises the “custody and administration of securities for others” as a banking business in accordance with Section 1 (1) No. 5 KWG . Among several are investment services together, which is a security service company must provide:
- The monetary and piece-wise processing of transactions carried out by customers (purchases, sales, transfers);
- the safekeeping of the securities as well
- Administrative activities in connection with dividend and coupon payments, corporate actions and general meetings.
The securities covered by the custody business are limited to securities .
Safekeeping of the securities
Custody begins with a securities order . The securities order to be signed by the bank customer is first checked internally for its plausibility. In the case of buy orders, a check is also made in advance planning whether the bank account has sufficient bank balances or free lines of credit ( securities lombard loan ) for debiting the purchase price ; for sell orders, there must be a corresponding stock of securities in the securities account . The orders are then forwarded to the trading system of the relevant stock exchange, where they are entered in the corresponding electronic order book of the responsible lead broker .
A distinction is made between safekeeping in an open and closed depot. In the closed depot, the bank only offers lockers for the effective items from over-the- counter transactions or delivery. All administrative activities must be taken over by the customer (e.g. redeeming the coupons or talons ), and no notifications are made regarding general meetings or corporate actions.
Administration of securities
As soon as the securities are booked in the securities account , their administration begins. The tasks of securities management largely depend on the type of security. In the case of shares , the sending of the annual reports , the deposit voting rights for the general meeting , capital measures as well as the crediting of the dividend belong to the main activities. In the case of bonds, there is the interest crediting of the coupons or observation of the maturity of lottery bonds . All the securities in the ongoing monitoring of securities-related occurs dates of the issuers .
The custodian bank redeems the interest, dividends and repayment claims for the securities it has held in custody - if necessary via the third-party custodian - and credits the holder with the income or proceeds . Any capital gains tax or withholding tax due will be paid to the tax office , taking into account existing exemption orders. If there are actual pieces , the administration and processing of the interest and dividend coupons (so-called sheets) is one of the tasks of the custodian bank.
In the case of bearer shares , the custodian bank sends the invitations to the general meeting to the shareholders concerned . In the case of a power of attorney granted by the customer, the custodian bank takes his shareholder voting right (custody account voting right). The customer can also instruct the custodian bank to vote in a certain way.
For these special activities, the credit institutions charge a custody fee calculated from the holdings in the securities account .
In Switzerland , some general provisions deal with the custody business. Art. 472 para. 1 OR contains a legal definition of the deposit agreement, Art. 484 OR deals with the confusion that occurs in the case of collective custody of securities. The general rule on combining and mixing in Art. 727 ZGB is also applicable. The general entitlement of the warehouse keeper to storage fees (deposit fees) is regulated by Art. 485 Paragraph 1 OR. Art. 973a OR is a provision specializing in collective custody and stock rights, according to which the custodian is authorized to keep reasonable securities from several depositors unseparated, unless a depositor expressly requests the separate safekeeping of his securities. With the delivery to the depositary, the depositor receives fractional joint ownership. As a special provision, the Book Effects Act (BEG) of October 2008 regulates the safekeeping of securities and value rights by custodians and their transfer. According to Art. 3 BEG, accountable securities or membership rights vis-à-vis the issuer which are credited to a securities account and which the account holders can dispose of in accordance with the provisions of the BEG are deemed to be book securities. In the case of compulsory liquidation for the purpose of general execution via a custodian, the book securities are subject to segregation, as in Germany (Art. 17 BEG).
In Austria , the Depotgesetz (DepotG) of October 1969 regulates the safekeeping of securities in a manner similar to that in Germany. A significant exception, however, is the custodian's insolvency . According to Section 4 DepotG, collective custody is deemed to exist if the custodian keeps justifiable securities of the same type unseparated from his own holdings of the same type or from those of third parties. The custodian is obliged to carry out collective custody unless a declaration has been made in accordance with Section 2 (2) DepotG on special custody. Pursuant to Section 5 DepotG, the depositor gains joint ownership of the collective inventory. In the event of insolvency proceedings against the custodian, the securities held in collective custody for the depositor form a special pool which, in accordance with Section 23 (6) of the DepotG, is to be created to satisfy the depositor. If this special amount is not sufficient for satisfaction, the depositors have normal bankruptcy claims.
In England investment services are ( English custodial services ) leave the depositories financial institutions ( english nominees or custodians ) that the property ( English legal title ) of the securities ( english securities ) by the investors ( English investor received), make the posting in CREST and to investors as trustee ( english trustees act).
- Hans Büschgen / Christoph Börner : banking management apprenticeship . UTB 4th edition, Stuttgart 2003, ISBN 3-8282-0241-4
- Jürgen Krumnow (Ed.): Gabler, Bank-Lexikon . Gabler, Wiesbaden