IV. Custodianship

  1. An independent Custody Services unit is normally responsible for all settlement and safekeeping of principal and client securities.

    1. A Custody Agreement must always be in place and carefully explained to the client. It should include the scope of service and specify special arrangements, if any. It should clearly indicate where the securities are safekept, e.g. ROSS, PCD or CEDEL/EUROCLEAR.
    2. A custody service group must have proper procedures for handling transactions, securities, safekeeping and reports.
    3. A periodic statement of holdings should be issued to clients indicating the securities held in their behalf and also indicating the estimated market value of these securities.

  2. Securities safekept for customers must be held separate and distinct from its inventory and should be periodically reconciled.