Opinion & Analysis

A European bank with an on-the-ground presence in all the major euro-zone markets is expected to rise to the challenge of T2S, and BNP Paribas Securities Services has developed a strategy that aims to insulate its clients from as many of the risks and complexities of the new settlement system as it can. The as yet unanswered question is whether the bank can develop an approach to T2S which actually saves those clients substantial amounts of money.

Steve Merry asks, "If Greece defaults – as many think it will – are your assets safe or will they slip through your grip faster than greased lightning?" Read on for a discussion of the risks of holding assets in Greece, Portugal, Ireland, Italy, and Spain, and what you can do to protect your fund from unnecessary additional risk.

Anyone buying a European mutual fund now receives enhanced protection from custodial risks. Do institutional investors need to ask for equal treatment?

Under Europe’s Alternative Investment Funds Directive (AIFMD), which came into force in 2013, fund depositaries have to indemnify investors in the region’s hedge funds against possible losses caused by fraud or negligence at the level of the custodian or sub-custodian.

"Relight my fire” sang Take That when there were five in the band and they are probably still singing it today with only three band members to show that it doesn’t matter when you sing it, it’s just important that you feel that you can still ignite something.  Perhaps there’s a case for relighting the fire and purpose of your existing dormant (or even non-existent) Service Level Agreement (SLA).   A detailed SLA that has been agreed by both parties can serve as a document with a wide range of uses for institutional investors, asset managers and even the service provider.

The £126 million fine levied by the UK Financial Conduct Authority (FCA) on BNY Mellon in April for breaches of the rules on the safekeeping of client assets was the latest in a series of similar sanctions.  The fine was the eighteenth penalty levied in four years on UK financial institutions for breaches of the UK’s custody rules (or “CASS”) regime, apparently highlighting a widespread industry problem.

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