Custody services, most commonly referred to as depository services in Czech, represent a specialized financial service focused on safe custody and management of securities and other financial assets on behalf of their owner. The providers of these services are usually large and stable banks or financial institutions, called custodians or depositories. Their main task is to protect clients' assets (such as investment funds, pension funds, insurance companies, or large private investors) from loss, theft, or misuse.
In addition to the custody of the assets, which are held separately from the bank's assets, custody services include various administrative and operational activities. The custodian takes care of Settlement of trades (ensures that when buying or selling, securities and money are transferred), corporate event management (e.g., payment of dividends, participation in general meetings), tax service, and regular reporting on the portfolio status. In essence, it acts as a highly reliable trustee, relieving the investor of the administrative burden and ensuring that his assets are safe and compliant with regulations.
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