Custody in the debt capital markets
Custody in the debt capital markets

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Custody in the debt capital markets
  • What is financial custody?
  • Role of a custodian
  • Tiers of ownership of debt securities
  • Credit, operational and legal risks relating to custody services
  • Credit risk
  • Operational risk
  • Legal risk
  • Risk identification and minimisation
  • Regulatory requirements
  • More...

BREXIT: As of 31 January 2020, the UK is no longer an EU Member State, but has entered an implementation period during which it continues to be treated by the EU as a Member State for many purposes. As a third country, the UK can no longer participate in the EU’s political institutions, agencies, offices, bodies and governance structures (except to the limited extent agreed), but the UK must continue to adhere to its obligations under EU law (including EU treaties, legislation, principles and international agreements) and submit to the continuing jurisdiction of the Court of Justice of the European Union in accordance with the transitional arrangements in Part 4 of the Withdrawal Agreement. For further reading, see: Brexit—introduction to the Withdrawal Agreement. This has an impact on this Practice Note. For guidance, see Practice Note: Brexit—impact on finance transactions—Brexit planning and impact—key issues for debt capital markets transactions and Brexit—impact on finance transactions—Derivatives and debt capital markets transactions—key SIs.

What is financial custody?

Systems and services for safekeeping or custody of debt securities are part of the infrastructure that helps to create an efficient, secure and liquid market for debt securities—see Practice Note: Debt securities market infrastructure—introduction.

Debt securities are usually held through an extended chain of intermediaries. The end investor has rights which amount to a form of ownership, but which do not fit into

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