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CUSTODY: CONTRACTS
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Contract killers Asset managers are forging more rigorous contracts with their custodians. Nick Fitzpatrick says the changes, which could affect prices, are revolutionary for an industry that’s three decades in the making
Global custody is witnessing possibly its For the AMF, the French regulator, it can now biggest shake up in the 30 years since the boast a higher level of regulatory protection for business first gained a footprint in the ‘Pre-crisis, it did not fund shareholders. institutional investment sector. matter so much to Speaking about the broader market, Three decades after custody banks began to Margaret Harwood-Jones, head of institutional persuade pension funds and asset management clients of a global investors at BNP Paribas Securities Services, businesses that their assets would be safer and custodian which sub- says: “I can see some contractual agreements in more efficiently administered if custodians the industry changing and new examples of looked after them, the Lehman Brothers custody banks they used. best practices emerging.” collapse of September 2008 and the more But network She says that another subject of contractual recent Bernard Madoff scandal have put these scrutiny, which also plays to the fears about claims to the test. management is far more counterparty failures that Lehman produced, is Largely, the industry has proved itself, yet important to clients now’ the extent to which custodians check the custody is nevertheless changing. integrity of their sub-custodian network. Apart from regulatory-led initiatives (see “Pre-crisis, it did not matter so much to separate article, p40-42), clients are recasting clients of a global custodian which sub-custody contractual agreements themselves. Investors banks they used. But network management is who were shaken by the impact of sub-prime- far more important to clients now,” says related chaos are much more rigorous about Harwood-Jones. their custodians’ duties and obligations when it One topic is whether or not custodians As an example, she says that clients want to comes to keeping assets secure, custody should return assets – at their own expense – if know if a sub-custodian commingles client executives report. a broker fails while those assets are in transit. assets with its own assets, which could leave And a further change that some anticipate There is no consistency in European law clients at risk if the custodian turns insolvent. is that more onerous duties for custodians about this, but France has firmly dealt with the “Global custodians have to demonstrate that could increase the price of custody- issue – and not in favour of custody banks. our sub-custodians have segregated third-party related services. Following a 2009 legal case involving assets on a client-by-client basis and that there custodians RBC Dexia Investors Services and is no commingling,” Harwood-Jones says. Contract killing Société Générale Securities Services, together Another area of focus is the level of The outcome for costs is still uncertain and not with asset managers Lafitte Capital, Delta compensation offered by custodians. everyone sees an upward price move as Alternative Management and Day Trade Asset Göran Fors, global head of custody at Nordic inevitable. But what does appear certain is that Management, a French court determined that banking group SEB, says: “Clients want to see clients are not waiting for regulators to tighten a custodian must return all assets immediately exactly how they will be indemnified. We see up the scope of a custodian’s responsibility. – a so-called ‘absolute obligation’ – even if the changes in the way institutions are evaluating Instead they are taking steps themselves to assets are then only partially returned to the new providers and the level of indemnification make contracts watertight. There is a move by custodian when insolvency proceedings against is a part of that criteria.” investors to try and contractually capture every the intermediary are finished. main eventuality that the financial crisis The case was complicated and centred on Greatly appreciated has taught them about and to determine assets used by prime brokers for collateral and But it could also be that the increased scrutiny how liable their custodians are when things go rehypothecation. The ruling is a comfort for of custodians is leading to a greater badly wrong. asset managers, but a problem for custodians. appreciation of the custodian’s job.
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CUSTODY: CONTRACTS
Daron Pearce, head of relationship “There are credit risk-related elements that leverage to offer a long list of custody- management, Emea, at BNY Mellon Asset exist within the custody product where we related functions, the shrinking menu Servicing, says: “The custody market has been advance money to clients. The cost of capital to may open up the market to niche players to fundamentally shaken and it has brought all banks is much higher than it was before the fill the gaps where other custodians pull out home the fact that there is risk in custody.” financial crisis so all finance activity is or can’t compete. An example, and again related to experiencing significantly higher costs. If levels Pearce, At BNY Mellon, says that in commingling, is that when investors retreated stay where they are, it’s easy to see that in some Q2 this year, activity in custody and from equities into cash as markets began to cases this may have to be shared with the client.” related asset servicing picked up as shake, they realised that their cash was held on A greater awareness of risk and the asset managers returned to focus on the custodian’s balance sheet and not contractual measures used to deal with it have operational issues, such as outsourcing back- segregated in the way their equities generally consequences for clients beyond cost, though. office functions. were. Therefore clients might favour a bank Fors, at SEB, says that some custodians Custody has long-since matured and it is with a strong credit rating to reduce risk in simply might not risk entering certain markets now rare to find a pension fund or asset their cash holdings. where financial instability is high due to manager that does not outsource its own But they may also appreciate that stable substandard financial infrastructure – for custody operations. custodians can charge a premium related to But over the past ten years custody banks this stability, too. If the risks associated with have sought to boost revenues and custody and the manner in which custodians differentiate themselves by rolling out value- can control these risks are understood better, it added services such as fund administration, may well give custodians a chance to revisit the ‘People thought custody fund accounting and performance risk-reward discussion without feeling too measurement. More recently custodians uncomfortable about it. was just a commodity. have competed fiercely to provide services At least, this is the kind of argument Now they recognise that related to the newly popular alternative custodians are edging towards. There is a lot investments industry, such as the pricing, of talk in the industry at present about the investment in settlement and accounting for esoteric repricing services in order to wean revenues technology we make, instruments and complex strategies. off basis-point charges related to assets, and to These services are offered on a best-of- reprice in accordance with risk. stability, and balance breed, or component, basis, or they are Asked about this, Pearce says: “When we sheet strength are all bundled together with traditional custody. look at our own pricing there is more realism Pearce says asset managers continue to on behalf of buyers now. People accept important and consider both options. custodians have to price for risk.” differentiating factors’ Bundling has been criticised in the past for He adds: “People thought custody was just a fuzzy pricing. But if custodians do price for commodity. Now they recognise that the risk, or offer more concentrated services in investment in technology we make, stability, competition with specialist providers, it and balance sheet strength are all important could be expected that pricing will become and differentiating factors.” less opaque. example, lacking a strong central French revolution counterparty, or where laws around sub- Revolutionary change Given the court ruling in France, there is little custody do not require funds to be segregated. A combination of regulatory change, client wonder that the cost of French custody may “It will be difficult for custodians to take on scrutiny and custodian realism is threatening increase. This was a view indicated in Funds all the risks that exist in specific markets,” to force up custody costs. Custodians hope Europe (May 2009) by François Marion, says Fors. clients will be philosophical about this chairman of Caceis Group, a French banking Similarly, Bruno Prigent, deputy head of if it happens. firm that operates custody services. Société Générale Securities Services, says: At least custodians have, by and large, “France is the European market where prices “The Lehman Brothers and Madoff episodes demonstrated their value. Speaking of BNY for custody, depositary and fund services are helped us identify clearly the different risks Mellon, Nadine Chakar, head of Emea at the lowest. Therefore, if it appears that the that we have when we provide depositary BNY Mellon Asset Servicing, told Funds French market charges the lowest price but services or fund administration services. Now Europe last October: “This episode bears the higher risk, then an adjustment will we have to address these different risks by [Lehman Brothers] tested us and it tested be necessary,” he said at the time. identifying the consequence for different our methods.” Harwood-Jones, at BNP Paribas, believes services. This might mean increasing prices, Changes in the custody landscape will that increased automation in custody could or discontinuing a particular service.” continue to unfold in the coming year. For offset upward pressure on costs. But there is an industry that’s been ticking along for still a pinch point. She says that the higher Activity 30 years or so, the changes to be seen in costs of borrowing money could impact If the menu of services does shrink, although the next twelve months could constitute clients’ pockets. large custodians may continue to swing their a revolution. fe
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CUSTODY: REGULATIONS
Return those assets.Now! Regulations formed in the wake of the financial crisis have troubling and far-reaching implications for custodians. A court ruling in France earlier this year was a case in point, writes Nick Fitzpatrick
The consultations that have flowed from claim equivalent sums back from Lehman’s governments in the wake of the financial own insolvency administrator. crisis have potentially far-reaching The measure is Further, the rule is considerably unpleasant consequences for custodians and those that particularly punitive as to the custodians because they did not use them. Some regulatory moves are central appoint Lehman as the prime to custody, such as Europe’s proposals for the it means the two broker/custodian; the hedge funds did. depositary banks of Ucits funds – a service custodians had to return Bruno Prigent, deputy head of SGSS, offered extensively by custodians. which provided custody for a fund operated Others impact them, such as the ECs the assets even though by Day Trade Asset Management (DTAM) proposed Directive for Alternative there was no guarantee involving around €3m of disputed assets, Investment Funds (AIFM), which covers says: “The AMF said that we must return many issues for non-Ucits funds including that they would be able all the assets held by Lehman to the depositary arrangements. to claim equivalent sums fund manager, even though they were not on These are still in draft form, but one our books.” outcome already reached is the move by a back from Lehman’s own court in France, sitting at the French insolvency administrator Two agreements regulator, the AMF, to force custodians to There were two agreements in place that restitute assets from failed intermediaries, affected the outcome. The first was between such as a broker, immediately. the asset manager and Lehman Brothers; the This stemmed from the collapse of second was between the asset manager, Lehman Brothers’ European business. Assets SGSS and Lehman Brothers. owned by three hedge funds were placed in “The second agreement required that the custody of two custody banks. But these SGSS would delegate custody to Lehman custodians were contractually obliged to Brothers, but that SGSS would retain delegate custody of the assets to Lehman responsibility for the custody,” said Prigent. Brothers’ prime broker unit for collateral “We said that it wasn’t possible to return all and rehypothecation. When Lehman the assets immediately. The prime broker collapsed the two custodians – RBC Dexia agreement was made under UK law and a Investor Services and Société Générale UK lawyer agreed with our calculation of Securities Services (SGSS) – were found how much we should return to DTAM at liable for returning them. once. But there is no specific article in The measure is particularly punitive as it French law about this. means the two custodians had to return “The Court of Appeal upheld the AMF the assets even though there was no view that all the assets should be returned to guarantee that they would be able to the asset manager immediately, whether or
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CUSTODY: REGULATIONS
not the assets had been – or would be in future – fully returned to us. “We have now returned the assets to DTAM and we are waiting for the transfer of the original assets from Lehman Brothers. The insolvency administrator will determine this.” RBC Dexia Investor Services is appealing to the Supreme Court in Paris. SGSS is considering an appeal.
Market risk Prigent says the need to return assets immediately leaves custodians exposed to market risk. “If a custody bank has to restitute assets before they are returned to it by the insolvency administrator, then it has to go to the market to buy them. The market price could change throughout the process, meaning the custodian could make a profit or a loss. But it is my principle that we should neither lose or profit from this process.” The French have made their decision, but the European Parliament’s AIFM Directive is trying to bring a harmonious approach to the liabilities of depositary banks across Europe. It is no less worrying to custodians than the French legal judgement. Article 17.5 of AIFM says a depositary should be responsible for “any loss of financial instruments” that occurs unless it can prove that it “could not have avoided the loss”. Custodians feel this may impose strict liabilities on depositaries, including for complex securities where investor checked financial strength and competence, entitlements may stem from a chain then it would fail the due care test and be of interconnected intermediaries beyond If a custodian reduces liable for assets. their control. the risk it is willing to Current proposals could harm investors, They think this is wrong. says the AGC, because the proposals may The Association of Global Custodians take, what affect will lead to the curtailment of important (AGC) responded by saying: “This change this have on clients? intermediary services and cause investors to would transfer risk to the depositary beyond discontinue or rework contracts with global what is reasonable or appropriate.” intermediaries. The AGC also notes that the liability that Similarly, Prigent, at SGSS, says: “If a AIFM places on them for failure to perform custodian reduces the risk it is willing to take, duties lacks a qualification found in the Ucits what affect will this have on clients? Directive that says this failure must “The Lehman Brothers and Madoff arise from “improper performance” or episodes helped us identify clearly the “unjustifiable failure”. different risks that we have when we provide The AGC wants to see a standard of “due depositary services or fund administration care” introduced, which would be similar to services. Now we have to address these the Ucits qualification of improper different risks by identifying the performance. For example, if a custodian consequences for different services. This cannot demonstrate due diligence when might mean increasing prices, or selecting a sub-custodian, such as that it discontinuing a particular service.” fe
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CUSTODY: SURVEY ANALYSIS
Flight to strength Strong and stable custodians have benefited from the financial crisis as clients have sought a safe place for their assets. But it’s not just the largest custodians that have won business. In some ways the crisis has been a great leveller, says Nick Fitzpatrick
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A ‘flight to strength’ over the past twelve demand for risk and compliance monitoring. months in global custody resulted from Julius Baer, with €38.4bn of assets, says it clients seeking to park their cash holdings in One of the greatest will enhance web-based communications. banks with strong credit ratings. But it was challenges for In general, client reporting, particularly in not just the largest banks that benefited. relation to counterparty exposures, is of Pictet, the Swiss bank, has €214.9bn in custodians in the past heightened importance. assets under custody, our latest survey finds. year was to assure There is already evidence from the fund But despite being at the smaller end of the management world to suggest that good asset scale, Pictet noted an increase in clients that market client communications can help retain demand for straightforward global custody infrastructure could business even as investment performance from pension funds “seeking a stable and risk falters. Greenwich Associates, a consulting averse custodian bank”. support the strains and research firm, has shown the Pictet may well have picked up some of this placed on it termination rates of asset managers with a from the custody service of UBS, where stronger client service ethos were 70% less assets have fallen from €2.426 trillion to than of those with below-average client €1.717 trillion. As is well known, UBS AG service, in spite of all the firms surveyed has had severe difficulties in its investment having generated poor performance. The banking division and other divisions have firm strongly advises its investment seen outflows. However, the bank’s Q2 management clients to focus cost-reduction financials, which still show a loss for the third efforts on non-client facing functions. consecutive quarter, report a stronger capital The same may be true for custodians. adequacy ratio. Nick Titmuss, head of global custody Asked about its inflows, Marc Briol, head Emea at Citi, which has €7.740 trillion of of custody at Pictet, says: “Pictet, which has assets, says that one of the greatest made its way unscathed throughout the challenges for custodians in the past year was financial crisis, has been increasingly to assure clients that market infrastructure regarded as a pillar of solidity in an could support the strains placed on it. otherwise troubled banking sector. As such, But he also feels smaller custodians would the bank has benefited over the past nine have struggled to handle specialised months from influxes of net new money reporting for clients and requests about coming from various sources on a scale market developments as a huge spike in the rarely witnessed in Pictet’s more than volume of transactions occurred. bicentennial history.” Yet Pictet’s experience, again, might show But if anything has equalled the need that smaller providers can also hold their for stability, it is the ability to communicate own if they prioritise client contact. The with clients. bank notes an increased demand for UBS notes that online reporting and real- unbundled reporting capabilities for funds time figures were the most in-demand on the one hand, but the fact that it saw a services over the past year. The custodian demand in third-party custody from other plans to enhance web-based reporting and to banks could be evidence of its ability to provide ways that allow clients to create PDF communicate effectively. reports based on on-line data. It is the first time Pictet has entered our Other custodians note the need to enhance survey. Could this be a sign that reporting, particularly in tandem with risk players outside the big league want to raise management. their game? Declan Kehir, head of custody Europe at A less risky business PNC Global Investment Servicing, which Caceis, the French custodian with €2.120 despite €405bn under custody is still small in trillion assets, notes an increased demand for comparison to other banks, says the firm risk management tools. SEB, the Nordic intends to increase its global network in the provider with €395bn of assets, highlights coming year and enhance securities lending.
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CUSTODY: SURVEY ANALYSIS
It will also enhance support for exchange- Opportunity abounds, then, but traded funds (ETFs), which have been a key maintaining profitability for ongoing driver of its business lately. Custodians, big and business is a challenge. Another ambitious smaller provider in the small, see opportunities BNY Mellon Asset Servicing, with $20.7 survey is Swedbank, based in Stockholm trillion (€14.6 trillion) under custody, with €100bn under custody. Although it uses arising from the crisis. reports that eroded asset values and JP Morgan as a global custodian and Many see opportunities significant deleveraging has occured, but it leverages its sub-custodian network, it plans remains profitable. to position itself as a gateway to Central and in the hedge Asked about the challenges for the custodian Eastern European markets and has fund and fund of hedge industry, Nadine Chakar, head of Emea asset appointed its own sub-custodians in many servicing at BNY, says: “The challenge in the countries there. funds sector, year ahead is simple: to continue to grow in a SEB, meanwhile, plans to grow its which is not surprising low or even zero growth environment. That transition management capability. will require us to continue to prioritise service Custodians, big and small, see given the criticism of excellence and to innovate, whether by opportunities arising from the crisis. hedge funds that leveraging existing capabilities within our Many see opportunities in the hedge wider organisation or by extending our offering fund and fund of hedge funds sector, custody assets with their into new areas within the trade lifecycle.” which is not surprising given the criticism of prime broker hedge funds that custody assets with their Eye on ratings prime broker. Similarly, Stephen Baker, director of custody State Street, which has €8.539 trillion of at Bank of Ireland Securities Services, which assets under custody, says: “Hedge funds are has €113.6bn of assets under custody, says: adjusting to what will undoubtedly be a “Despite poor market values, volumes have fundamentally different environment. For a remained strong. This high level of activity start, their investors are likely to demand generates cost but lower asset values are independent custody and administration of negatively impacting income. Managing their investments. Although many large balance between cost and income is still hedge funds will be understandably reluctant a challenge.” to walk away from their substantial And all this will take place under the investment in internal administration, they microscope of credit rating agencies and will find it increasingly difficult to say no regulators with an eye on capital adequacy to clients’ demands for the increased rules. Maintaining ratings is a key challenge assurance that comes of independent pricing for all custodians if they are to benefit from the and administration.” flight to strength. fe
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CUSTODY: ASSETS
ASSETS UNDER CUSTODY: IN EUROPE (EURO BN) AUC BBH BNP BNYM BoI CAC CIT HSBC JPM JB Traditional 159 888 640 Hedge funds - 81 43 Private Equity -6142 Pension funds - - 216 Direct property funds 10 - - Others 441 - 837 Total European Custody Assets 610 n/d n/d 55 975(1) 8296(2) 1954 1878 n/d
(1) CACEIS total is for Assets under Administration (no custody split available) (2) at May 2009 (no class split available) (3) at March 2009 (no class split available)
ASSETS UNDER CUSTODY: GLOBAL (EURO BN) BBH BNP BNYM BoI CAC CIT HSBC JPM JB 31 Mar 2009 1034 3342 13800 113.6 2120 7740 3126(2) 9608 38 31 Mar 2008 1500 3603 14600 130 2123 8328(1) 3175(2) 9909 38
(1) at 31 May 2008 (2) HSBC figures at 30 June (3) RBC Dexia total AuA at 30 June 2009 (AuC split not available; source: company's website)
GLOBAL CUSTODY SERVICES BY ASSET CLASS (%) ASSET CLASS BBH BNP BNYM BoI CAC CIT HSBC JPM JB Bonds 33 n/d 73 30 n/d 69 58 60 44 Equities 57 25 55 31 35 21 20 Money Markets 425-3-34 Property --5--1- Private Equity --5---- Others 6---4182 TOTAL 100 n/d 100 100 n/d 100 100 100 100
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NT PIC PNC RBC SEB SG SSt SWE UBS 32 11 5 1- - -- -1588 - -- -20261 582 215 37 n/d n/d 2762 1078(3) 36 360
NT PIC PNC RBC SEB SG SSt SWE UBS 2200 214.9 406 1435(3) 395 2762 8539 c.100 1717 2530 232.7 459 n/d 480 2731 9428 n/a 2426
NT PIC PNC RBC SEB SG SSt SWE UBS 40 22 9 15 64 42 43 48 36 42 21 80 9 42 52 21 13 23 49 - 16 16 - 5 ------2 --- 5- --- 11 13 21 - 11 - 5 24 100 100 100 n/d 100 100 100 100 100
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CUSTODY: EUROPEAN PRESENCE
GLOBAL CUSTODY SERVICES BY GEOGRAPHY
BBH BNP BNYM BoI CAC CIT HSBC JPM JB
Austria ✔✔✔ Belgium ✔✔ ✔ ✔ ✔ Bulgaria Croatia ✔ Cyprus ✔✔ Czech ✔ Denmark ✔✔ Estonia Finland ✔ France ✔✔ ✔✔ ✔ ✔ ✔ Germany ✔✔✔✔✔✔ Greece ✔✔✔ Guernsey ✔✔✔ Hungary ✔✔ Iceland Ireland ✔✔✔ ✔ ✔ ✔ ✔ Italy ✔✔ ✔ ✔ ✔ Jersey ✔✔✔ Latvia ✔ Lituania Luxembourg ✔✔✔ ✔ ✔ ✔ ✔ Norway ✔✔ Netherlands ✔✔ ✔✔ ✔ Poland ✔✔ Portugal ✔✔ Romania ✔ Slovakia ✔ Slovenia Spain ✔✔ ✔ ✔ Sweden ✔✔ Switzerland ✔✔✔ ✔ ✔ ✔ ✔ UK ✔✔✔ ✔ ✔ ✔ ✔ ✔
BBH Brown Brothers Harriman NT Northern Trust BNP BNP Paribas Securities Services S.A. PIC Pictet & Cie BNY The Bank of New York Mellon PNC PNC Global Investment Servicing BoI Bank of Ireland Securities Services RBC RBC Dexia Investor Services CAC CACEIS Investor Services SEB SEB (Skandinaviska Enskilda Banken) CIT Citi SG Société Générale Securities Services HSBC HSBC Securities Services SSt State Street Corporation JPM JP Morgan Chase & Co SWE Swedbank JB Bank Julius Baer & Co Limited UBS UBS AG
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NT PIC PNC RBC SEB SG SSt SWE UBS
✔✔ ✔✔✔✔ ✔ ✔ ✔✔ ✔✔ ✔ ✔✔ ✔ ✔✔ ✔✔✔ ✔✔✔✔✔ ✔✔ ✔✔
✔✔✔✔✔✔ ✔✔ ✔✔✔ ✔✔✔ ✔✔ ✔✔ ✔✔✔✔✔✔✔ ✔ ✔ ✔✔✔✔✔ ✔✔✔✔ ✔ ✔
✔ ✔✔ ✔ ✔ ✔✔✔ ✔✔ ✔✔✔ ✔✔✔✔ ✔✔ ✔
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CUSTODY: MANDATES A bigger slice of pie BNP Paribas’ win of a large hedge fund mandate from a prime broker is a sign that custodians can now compete in earnest for the hedge fund market. Nick Fitzpatrick looks back at twelve months of business wins and losses
It takes a brave person within an asset State Street, the global custodian and asset management business to stick their neck out management firm, has also seen some success and claim outsourcing operations like fund ‘Historically we would in the realm of complex instruments. M&G administration represent a long-term, not have seen hedge Investments, the UK and European strategic way to lower costs and increase investment arm of the Prudential Group with efficiencies. Once the deal is done, they are funds looking for global £141bn (€160bn) of assets, appointed State walking with a target painted on their back. custodians, but we are Street earlier this year to provide investment Nevertheless, asset managers have still services for £5.8bn in assets. sought outsourcing opportunities during the now because they want The custodian will provide share pricing last year of uncertainty. to segregate their assets and fund accounting for a number of M&G BNP Paribas Securities Services says it has funds that have the ability to invest in complex won a major hedge fund outsourcing contract. and know where their bonds and OTC derivatives. Previously, the The win is seen as a sign of how hedge funds money is’ functions were carried out in-house. are more critical about commingling custody “State Street was the clear choice in our with their prime brokers. detailed search for a servicing partner,” said Margaret Harwood-Jones, head of Martin Lewis, chief operating officer of institutional investors at the securities M&G Investments. “State Street stood servicing firm, declined to name the fund, but above the rest because of its ability to said the assets won numbered in the billions support the complexity of M&G’s of pounds. investment parameters.” The fund previously used a prime broker as its custodian. Harwood-Jones says: ETF market “Historically we would not have seen hedge The burgeoning market for exchange-traded funds looking for global custodians, but we are funds (ETFs) is also yielding business for now because they want to segregate their custodians. BNY Mellon Asset Servicing and assets and know where their money is.” JP Morgan Worldwide Securities Services She said BNP Paribas has picked up a have both announced wins in this sector. “dozen or so” hedge fund mandates Credit Suisse Asset Management (CSAM) relatively recently. appointed BNY Mellon to provide custody This year the firm also won a non-hedge and other services including accounting and fund securities servicing mandate from transfer agency to support the launch of London-based Henderson Global Investors CSAM’s first Irish ETFs. and has integrated the long-only business of The ETFs are Ucits products and are based Henderson’s recent acquisition, New Star on broad market equity and fixed income Asset Management. indices. The funds will be marketed under the New Star’s previous provider was HSBC. ‘Xmtch’ ETF brand and will trade initially on New Star’s hedge fund business remains with the Swiss Stock Exchange with multiple cross HSBC for the time being, while Henderson’s listings across Europe. hedge business is with JP Morgan Worldwide Ross Whitehill, head of offshore Securities Services. management at BNY Mellon Asset Servicing,
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The burgeoning market for ETFs is also yielding business for custodians. BNY Mellon Asset Servicing and JP Morgan Worldwide Securities Services have both announced wins in this sector
said the win was a continuation of a global and longstanding relationship with CSAM. Over the last ten years, BNY Mellon’s ETF services business has grown to exceed US$100bn (€70.1bn) in ETF assets under custody worldwide. Proshares, part of Profunds Group, appointed JP Morgan Worldwide Securities Services to service eight newly launched international ETFs. JP Morgan already provided custody, fund accounting and fund administration for 64 of ProShares’ equity and fixed income ETFs with total assets of $25bn. JP Morgan also saw success with OTC derivatives. In June, Schroder Investment Management, which had £103.1bn of assets under management at 31 March, appointed JP Morgan Worldwide Securities Services to provide fund accounting, OTC derivatives services and compliance reporting for its UK range of retail funds. JP Morgan already provided custody, accounting, OTC derivative compliance global derivatives services for UK funds, which In April this year, Société Générale Securities reporting, securities lending, trust & fiduciary, have $20bn under management. Services (SGSS) said that through 2008 it cash and foreign exchange services to The appointment is an extension of the increased assets under administration in Schroders, and it services the company from services JP Morgan already provided for UBS Germany by 20% with nine mandates wins. Australia, Hong Kong, Luxembourg, the US Global Asset Management in the UK, which SSGS Kag, SGSS’s German business, won and the UK. include custody and related services. UBS seven master Kag mandates and two Markus Ruetimann, group chief operating Global Asset Management will continue to outsourcing contracts. The new mandates officer at Schroders, said: “We maintain an provide fund accounting for its funds in brought the total of assets under administration extensive global operational footprint with JP other markets. for SGSS in Germany to €55bn. Morgan across many products and locations. A master Kag involves the integration of all Consolidating custody and UK fund High standards assets of an institutional investor into one legal accounting services with one provider makes Matthew Stemp, head of UBS Global Asset vehicle (called a spezialfond) administered by a sense as it reduces operating expenditure Management in the UK, said: “Our decision to German Investment Company (Kag) in order and increases operational efficiencies for appoint JP Morgan as the service provider for to centralise and streamline accounting, both parties.” our UK fund range was based on a desire to reporting and risk management. Further for JP Morgan, in January the firm select a partner who could best meet our SGSS Kag was created as a result of the said UBS Global Asset Management had demands for the highest quality standards. We custodian’s acquisition of Pioneer Investments’ appointed it to provide fund accounting and believe JP Morgan is best placed to deliver this.” middle and back office capabilities in 2008. fe
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CUSTODY VIEWS Views from the top Senior figures in custody and asset servicing highlight challenges for custodians and clients in the year ahead
CITI SOCIETE GENERALE SECURITIES SERVICES Nick Titmuss, Sebastien Danloy, head of sales and global relationship management managing director, The securities services industry has been impacted later than others by the crisis. head of global custody Key indicators which influence custodians’ revenues have deteriorated: ie stock EMEA, global exchanges levels, interest rates and at the same time, asset management transaction services customers have experienced substantial outflows. The crisis also modified the The greatest challenges for asset allocation, with a switch from alpha to beta and money market custodians in the past year management. The securities services industry will inevitably be reshaped. One have been supporting our clients through the example is the nature of the depositary function with the associated risk and the level of associated crisis in the market and instilling confidence fees. Custodians’ challenges are to prepare the post-crisis recovery by maintaining profitability (via that the market infrastructure can support the further industrialisation and cost optimisation) while staying focused on their clients’ requests and strains placed on it; advising clients on the helping them to mitigate risk. developments in troubled markets and currencies and how best to minimise operational risk; and smaller custodians SEB STATE STREET struggled to handle the huge spikes in volume Göran Fors, global Joseph L Hooley, of transactions and requests from clients on head of custody president and CEO market developments and specialised reporting. A bit of ‘back to basics’ The greatest challenges Challenges we expect in the year ahead will drive our industry facing custodians over the include having to advocate on behalf of our going forward. We will past twelve months have clients in the market as significant new see a slowdown in the been, and will continue to regulations are introduced around the world; creation of new derivative be, market volatility, fierce continuing to lower the total cost of ownership instruments or those types of innovations, but competition and heightened regulation as a result in the entire life cycle; and enhancing the it will come back again slowly over time. For of the financial crisis. Navigating this difficult middle office capabilities to allow clients to the time being there will be a back to environment while providing customers with the focus on risk/return investment decisions. basics approach driven by cost efficiency and products and services they need will separate the risk mitigation. winners from the losers going forward.
Bank of Ireland Securities Services UBS Stephen Baker, director, custody operations Stephan Hänseler, executive director, head The challenge of managing risk in all its guises continues to of institutional client services be very important. This includes operational risk, credit risk After recent market turmoil we experience an and counterparty risk. How can we manage that risk while intensified trend towards ‘open architecture’ and still seeking to grow with existing and new customers? ‘transparency’. With diversified portfolios covering Despite poor market values, volumes have remained very instruments such as private equity and hedge strong. This high level of activity generates cost, but lower funds you need to have a strong reporting asset values are negatively impacting income. Managing the balance between cost platform to cope with demanding client requirements. For mutual funds and income continues to be a challenge. you need to offer ‘look-through’ facilities, allocating underlying Perhaps the greatest challenge for custodians in the regulated funds industry is investments to categories such as asset class, currency and industry. For the lack of clarity, but accompanied by some worrying comments, in relation to the near future we expect more requests to offer full ad-hoc reporting responsibility and liability of custodians for funds arising from the Madoff and capabilities on web platforms. Client feedback so far makes us believe Lehmans cases. that we are ready to deliver further transparency to our clients’ assets.
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JP MORGAN PNC GLOBAL Rajen Shah, managing Declan Kehir, head of custody operations Europe director, custody During the past year, custody became an extreme sport as market volatility, the product executive collapse of household-name firms, and a wholesale exodus from hedge funds made The last twelve months headlines around the globe. We have seen increased demand (and respect) for have been dominated by traditional custody services as clients rediscover the importance of record keeping the global credit crisis and that segregates client assets and values holdings daily. In the coming year, our punctuated by a series of industry clearly faces added regulation along with beefed-up scrutiny of compliance seismic events (the demise of Lehman Brothers, with existing regulations. Forward-looking custodians will further develop capability to manage risk the Icelandic meltdown, the Mumbai terrorist exposure both enterprise wide and micro level. We also anticipate continued acceleration in the growth attacks, etc) that have created a series of of exchange-traded funds. formidable industrywide challenges leading to a reassessment of business priorities and principles. They also provided the ultimate test BBH of an organisation’s readiness in terms of Custodians can respond Geoffrey M Cook financial strength, control and resilience. JP to the emasculation of the Partner BBH &Co, Morgan’s state of preparation and ongoing managing director BBH focus on these attributes over the past year has prime brokerage Luxembourg S.C.A. positioned us well to face the challenges of the capabilities of some The greatest challenges for coming year. custodians in this past year Looking forward, waves of new mandatory investment banks by of economic crisis have been regional regulations are coming that must be utilising custodians' around providing data to help clients manage their addressed at a custodian level, but also have counterparty exposure and the shortened window the potential to fundamentally change the balance sheets to support of delivery times for that data. In terms of business landscape. Transparency, risk, financial and develop their own challenges over the coming year, the arrival of strength and business resiliency will continue to Ucits IV, the influence of the proposed AIFM be key drivers in the quest for asset safety. high-capacity prime Directive and the consultation on the role of Ucits These demands must be balanced with the brokerage product sets depositories foreshadow the most significant drive to move the industry forward – delivering review of custodial responsibilities the industry has service quality via enhanced product capability known since the introduction of Ucits over 20 and automation in a risk-mitigated manner years ago. Continuing automation of emerging remains the key focus. asset types such as derivatives will also be key.
SWEDBANK BNY MELLON Henrik Staffas, head of fund services, Nadine Chakar, head of EMEA asset servicing Swedbank Markets Securities Services The credit/liquidity crisis tested our people and our Swedbank offers fund services primarily in its home systems to the limit – but the pipework proved robust markets Sweden, the Baltic countries and Luxembourg. and we assisted our clients in negotiating a path The services range from those offered in connection through the market meltdown. Asset values have with depository banking services – custody, securities eroded and we’ve seen significant deleveraging, but lending, cash management solutions, compliance we remained profitable throughout the crisis, and monitoring to fund administration, transfer agency and distribution support. remain so today, which is testament to our financial stability and strength as In relatively small markets – the clients expect their providers to be able to an institution. The challenge in the year ahead is simple: to continue to offer the whole service chain. Yet the challenge has been and will continue grow in a low or even zero growth environment. That will require us to to be to keep up the expensive diversified service in the times of decreasing continue to prioritise service excellence and to innovate, whether by AuMs and huge pressure from clients towards lower fees while meeting the leveraging existing capabilities within our wider organisation or by top standards of the industry and improving quality of service. The rapidly extending our offering into new areas within the trade lifecycle. We possess changing infrastructure and potential over-regulation by the authorities are the commitment and creativity to meet that challenge. the main challenges in the future.
CACEIS José-Benjamin Longrée, member of the executive committee A long-term impact of the financial crisis is that it has served to strengthen the hand of regulation. The failure of Lehmans that sparked off the controversy surrounding the extent of depositary banks’ liabilities was then compounded by Madoff. These events lead much discussion about a ‘guarantor’ role for the depositary bank. If this were to take place, the depositary would have to reassess the levels of shareholder equity it holds to guarantee investors’ liabilities and take steps to adjust its fees to take into account the increased risk exposure.
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HSBC SECURITIES SERVICES NORTHERN TRUST Paul Stillabower, Mark Schoen, senior vice president, global product and strategy global head of The market turmoil in Q4 2008 and the beginning of 2009 created significant business development challenges for our investment manager clients. Of paramount importance was the – fund services, HSBC need for an independent fund administrator and custodian, and exposure to a Securities Services bank with a strong, low-risk balance sheet. As a result, along with the challenges The greatest challenge for around liquidity and fund redemptions, Northern Trust saw a significant inflow of custodians in the past year assets from hedge funds and prime brokers. has been how to respond Looking forward, the European Commission’s draft directive on Alternative to the banking crisis. For some custodians this Investment Fund Managers has generated a very mixed response from custodians and industry was a matter of survival through TARP and participants. The draft directive is scheduled to be approved by the European Parliament in Q4 2009 other means, but HSBC needed and took no and implemented in 2011. In its current form the draft directive appears to impose new and public funding. As a consequence, HSBC in unprecedented standards of liability on custodians that could lead to the curtailment of important common with a small number of other well- intermediary services. capitalised and liquid banking groups, has had the challenge of addressing new business flows arising from inward flight to quality, and using sophisticated in-house global markets products Transparency, risk, financial strength and business to deploy these flows effectively for clients. Over the next year there will be an resiliency will continue to be key drivers in the increasing regulatory challenge, particularly in quest for asset safety Europe, as legislators increasingly seek to impose further depository liability and asset restitution upon custodian banks. Custodians will need to respond prudently by ensuring BNP PARIBAS PICTET they can charge sufficiently to compensate for any additional risk imposed upon them. More Jacques-Philippe Marc Briol, CEO, positively, custodians can respond to the Marson, CEO Securities Pictet Custody emasculation of the prime brokerage Services Services capabilities of some investment banks by Over the past year, Over the past year the utilising custodians' balance sheets to support investment strategies and greatest challenges have and develop their own high-capacity prime trading have continued to surrounded the financial brokerage product sets. globalise; consolidation markets turmoil. The among asset owners and managers, as well as custodial model was securities services providers is set to persist able to secure clients assets and upheld a and regulatory change, both towards proactive stance to mitigate counterparty RBC DEXIA harmonisation and to counter risk will be a risk. There was tremendous pressure on Rob Wright, global constant for the coming years. providers with inadequate pricing structure. head, product & client Against a backdrop of price squeezing and Other issues included transparency over the segments counterparty risk, the greatest challenge for crisis measures and clients’ focus. Looking to The greatest challenge of custodians has been, and will continue to be, the year ahead, we need to demonstrate that the past year was ensuring the ability to commit to long-term investment client assets are secured and segregated. We that we remained close to in technology, expertise and a global presence also need to further develop the integrated our clients within a rapidly providing clients with tailored solutions that fund administration and custody model. changing landscape. We need to maintain the meet and anticipate their needs across the Additionally we must strengthen our position level of success we had in that respect. As the globe. as a trustworthy, strong, accountable and fund management industry reshapes itself we Clients are looking for long-term commitment independent provider with effective Chinese will need to deliver the new products, cost from a provider with worldwide capabilities walls. There needs to be more transparency management and outsourcing solutions the new and an intimate knowledge of local markets, in the pricing models through unbundling of environment demands while maintaining our tax and regulatory issues, with whom they can services at every level in the value chain. reputation for service excellence. RBC Dexia optimise opportunities in all markets. A global Only firms with long-term commitment consistently engages its clients on their future reach and the local connectivity to shape the towards custody services will remain. There needs and our bespoke approach makes us well future of the industry will be the key to will be further polarisation between positioned for times of change. success. manufacturers and distributors. We also need new regulatory standards
56 57 Custody directory cover:Layout 1 28/8/09 14:50 Page 35 funds europe GLOBAL CUSTODY DIRECTORY 2009 BBH 58 BNP PARIBAS 58 BNY MELLON 58 BOISS 59 CACEIS 59 CITI 60 HSBC 60 JP MORGAN 60 JULIUS BAER 62 NORTHERN TRUST 64 PICTET 64 PNC GLOBAL 65 RBC DEXIA 65 SEB 66 SGSS 68 STATE STREET 66 SWEDBANK 67 UBS 67 60-69 Custody directoryTSASPnf:Layout 1 28/8/09 14:53 Page 58
CUSTODY DIRECTORY Custody 2009
BBH BNP PARIBAS ROM Bank Austria Creditanstalt AG Brown Brothers Harriman BNP Paribas Securities Services S.A. SLO Bank Austria Creditanstalt AG 140 Broadway 66, rue de la Victoire SVK Bank Austria Creditanstalt AG New York, NY 75009 Paris, France SPA BNP Paribas Securities Services 10005 Tel: + 33 (0)1 42 98 10 00 SWE Danske Bank USA Fax: + 33 (0)1 42 98 13 42 SWI BNP Paribas Securities Services Tel: +1 212 493 1818 Web:http:/securities-services.bnpparibas.com UK BNP Paribas Securities Services Web: www.bbh.com Country of origin: France * Clearstream Bank appointed temporary Country of origin: United States Operating in Europe: 75 years ISK cash correspondent on 14 Oct 2008 Operating in Europe: 81 years Senior Executives: Domestic markets that are strategically Senior Executives: Jacques-Philippe Marson (Paris) important in the near future: Jeffrey Holland (London) Chief Executive Officer • UK Offshore, Jersey, Guernsey, Isle of Man Partner Charles Cock (Paris) • Turkey Geoffrey Cook (Luxembourg) Global Head of Coverage and Client Solutions • Singapore Partner Michel Laurent (Paris) Services offered in addition to Custody: Ciaran McNamee (London) Head of Global Network and Strategy • Securities lending Senior Vice President Frederic Perard (Luxembourg) Head of Global Fund Services • Equity finance Business split: n/d • Cash management Parent’s other main business lines: Business split: n/d • Collateral management • Banking and advisory Parent’s other main business lines: • Prime brokerage • Investment management • Retail banking • Tax reclamation • Corporate and investment banking • Commission recapture European sub-custody arrangements: • Asset management and services • Performance attribution n/d • Insurance • Proxy voting • Compliance monitoring Domestic markets that are strategically European sub-custody arrangements: • Fund admin services important in the near future: AUT BNP Paribas Securities Services • Transfer agency • China BEL BNP Paribas Securities Services • Distribution support • Pre frontier markets such as Africa. BUL Bank Austria Creditanstalt AG • Transition management • Brazil CRO Bank Austria Creditanstalt AG Services offered in addition to Custody: CYP BNP Paribas Securities Services Products/services showing the greatest • Securities lending CZE UniCredit Bank Czech Republic A.S. increase in demand in past 12 months: • Cash management DEN Nordea Bank Danmark A/S • Class actions • Performance attribution EST Bank Austria Creditanstalt AG Products/services for (further) • Proxy voting FIN Svenska Handelsbanken development over the next 12 months: • Compliance monitoring FRA BNP Paribas Securities Services • Class actions • Fund admin services GER BNP Paribas Securities Services • Transfer agency GRE BNP Paribas Securities Services BNY MELLON • Distribution support GUE BNP Paribas Securities Services BNY Mellon Asset Servicing HUN BNP Paribas Securities Services The Bank of New York Mellon Products/services showing the greatest ICE Islandsbanki, Reykjavik * BNY Mellon Financial Centre increase in demand in past 12 months: IRE BNP Paribas Securities Services 160 Queen Victoria Street • Global distribution support services, ITA BNP Paribas Securities Services London EC4V 4LA particularly UCITS in Asia JER BNP Paribas Securities Services UK Products/services for (further) LAT Bank Austria Creditanstalt AG Tel: +44 (0)20 7163 2222 development over the next 12 months: LTU Bank Austria Creditanstalt AG) Fax: +44 (0)20 7163 5811 • Infomediary® and BBH Direct® to LUX BNP Paribas Securities Services Web: www.bnymellon.com reduce client costs and increase reach NED BNP Paribas Securities Services • InfoFX® NOR Nordea Bank Country of origin: USA • Securities lending POL BNP Paribas Securities Services Operating in Europe: 43 years • ETFs POR BNP Paribas Securities Services (London office opened in 1966, branch in 1967).
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Senior Executives: • Tax reclamation CACEIS Nadine Chakar (London) • Commission recapture CACEIS Investor Services Head of EMEA, BNY Mellon Asset Servicing • Performance attribution 1-3 Place Valhubert Daron Pearce (London) • Proxy voting 75006 Paris, France Head of UK and Ireland (onshore) • Compliance monitoring Tel: + 33 (0)1 57 78 00 00 Michelle Grundmann (Frankfurt) • Fund admin services Web: www.caceis.com Head of Germany, Austria, Switzerland and • Transfer agency Central Europe • Distribution support Country of origin: France. A standalone Ross Whitehill (London) • Transition management asset servicing company operated by Crédit Head of offshore, Nordics, Non-German speaking Agricole (85%) and Natixis (15% ) Products/services showing the greatest Europe and Middle East/North Africa Operating in Europe: since mid-80s. increase in demand in past 12 months: Business split: custody represents (year end • Class actions services Senior Executives: 2008) 36% of wider organisation revenues. • Enhanced regulatory and risk reporting François Marion (Paris) Parent’s other main business lines: • Derivatives reporting/administration. CEO and Chairman of the Executive Committee wide range of asset management and Products/services for (further) Michel Bois (Paris) securities services solutions delivered through development over the next 12 months: Member of the Executive Committee the following six core businesses: • Class actions service offering José-Benjamin Longrée (Luxembourg) Member of the Executive Committee • Asset servicing • Risk reporting Guillaume Fromont (Paris) • Asset management • Reporting on repo transactions. Member of the Executive Committee • Wealth management • Broker-dealer and advisor services BOISS Business split: n/d • Issuer services Bank of Ireland Securities Services Parent’s other main business lines: • Treasury services New Century House • Fund administration Mayor Street Lower, IFSC • Corporate trust European sub-custody arrangements: Dublin 1, Ireland AUT UniCredit Bank Austria AG European sub-custody arrangements: n/d Web: www.boiss.com BEL ING Belgium, SA/NV Domestic markets that are strategically BUL ING Bank N.V. Country of origin: Ireland important in the near future: CRO Privredna Banka Zagreb d.d. Operating in Europe: 38 years • Germany CYP EFG Eurobank Ergasias S.A. Senior Executives: • Hong Kong CZE ING Bank N.V. • USA DEN Danske Bank Liam Manahan (Dublin) EST SEB Bank AS Managing Director Services offered in addition to Custody: FIN Skandinaviska Enskilda Banken Stephen Baker (Dublin) • Securities lending FRA BNP Paribas Securities Services Director of Custody Operations • Equity finance GER BHF Asset Servicing GmbH John Sheridan (Dublin) • Cash management GRE EFG Eurobank Ergasias S.A. Associate Director of Custody Operations • Collateral management GUE The Bank of New York Mellon • Prime brokerage Business split: custody represents (year end • Tax reclamation HUN ING Bank N.V. 2008) 20% of wider organisation revenues. • Commission recapture ICE New Landsbanki Islands Parent’s other main business lines: • Performance attribution IRE The Bank of New York Mellon • Securities lending • Proxy voting ITA Intesa Sanpaolo S.p.A. • Middle office services • Compliance monitoring JER The Bank of New York Mellon • Administration • Fund admin services LAT AS SEB banka • Deposit and FX • Transfer agency LTU SEB Bankas Domestic markets that are strategically • Distribution support LUX Banque et Caisse d’Epargne de l’Etat • Transition management NED BNY Mellon Asset Servicing B.V. important in the near future: • USA also: trustee services; regulatory reporting; NOR DnB NOR Bank ASA tax reporting; fund structuring; fund POL ING Bank Slaski •UK • MENA accounting; automated pooling; financial POR Banco Comercial Portugues reporting; fund unit pricing; daily, intra- ROM ING Bank N.V. Services offered in addition to Custody: daily and real-time valuations; hedge fund SLO UniCredit Banka Slovenia d.d. • Securities lending and FOHF valuations; multiple share class; SVK ING Bank N.V. • Cash management multiple pricing; shareholder record keeping SPA Santander Investment S.A. • Collateral management and reporting; company secretary service; SWE Skandinaviska Enskilda Banken • Tax reclamation virtual pooling; cloning; dealing room SWI Credit Suisse • Commission recapture functions; funds dealing; corporate trust UK The Bank of New York Mellon • Performance attribution Products/services showing the greatest Domestic markets that are strategically • Proxy voting increase in demand in past 12 months: important in the near future: • Compliance monitoring • Outsourcing • Ireland • Fund admin services • Risk management tools and analysis • Luxembourg • Transfer agency • Custody of previously unregulated •UK • Distribution support offshore funds • Transition management Products/services for (further) Services offered in addition to Custody: Products/services showing the greatest development over the next 12 months: • Securities lending increase in demand in past 12 months: • Post-trade services, such as control and • Cash management • ETFs reconciliation of traded/settled • Collateral management • Structured products positions and delivery of traded stocks to • Prime brokerage • Distressed property final beneficiaries.
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CITI Services offered in addition to Custody: DEN Danske Bank Citi • Securities lending EST SEB Pank AS Citigroup Centre, Canary Wharf • Equity finance FIN Nordea Bank Finland plc London E14 5LB • Cash management FRA CACEIS Bank UK • Collateral management GER HSBC Trinkaus & Burkhardt Tel: +44 (0)20 7986 6000 • Prime brokerage GRE HSBC Bank plc Web: www.transactionservices.citigroup.com/ • Tax reclamation HUN UniCredit Bank Hungary Zrt transactionservices/home/ • Commission recapture IRE HSBC (Equities); Euroclear (Debt) • Performance attribution ITA BNP Paribas Securities Services Country of origin: USA • Proxy voting LAT AS SEB Banka Operating in Europe: 27 years • Compliance monitoring LTU SEB Vilniaus Bankas LUX Clearstream Banking Senior Executives: • Fund admin services • Transfer agency NED Fortis Bank (Nederland) NV Nick Titmuss (London) NOR DnB NOR ASA • Distribution support Managing Director, Head of Global Custody POL ING Bank Slaski • Transition management EMEA POR Banco Santander De Negocios ROM ING Bank N V Bucharest Branch Business split: n/d Products/services showing the greatest SLO UniCredit Banka Slovenija d d Parent’s other main business lines: increase in demand in past 12 months: SVK Ceskoslovenska Obchodna Banka AS (source: Annual Report 2008) • REITS SPA BNP Paribas Securities Services • Global Cards 0.5% • Private equity SWE Skandinaviska Enskilda Banken • Consumer Banking 36.5% • Alternative investments SWI UBS AG and Credit Suisse • Institutional Client Group 59.8% • Class actions UK HSBC Bank plc (includes securities and banking, and Products/services for (further) transaction services) development over the next 12 months: Domestic markets that are strategically • Global Wealth Management 3.2% • REITS important in the near future: • Private equity • Middle East (capture new growth) European sub-custody arrangements: • Alternative investments • Offshore Europe (grow/scale existing) AUT Citi Milan • Class actions • Asia (maintain dominant position) BEL Fortis Bank Nederland NV Services offered in addition to Custody: BOS Bank Austria Creditanstalt HSBC BUL ING Bank, Sofia • Securities lending HSBC Securities Services • Equity finance CRO Privredna Bank, Zagreb HSBC Bank plc CYP Hellenic Bank, Nicosia • Cash management 8 Canada Square • Collateral management CZE Citibank N.A. Prague London, E14 5HQ DEN Nordea Bank, Denmark • Prime brokerage (partial) UK • Tax reclamation EST Hansabank AS, Tallinn Tel: + 44 (0)20 7005 8945 • Commission recapture FIN Nordea Bank, Finland Web: www.hsbcnet.com/hss • Performance attribution FRA Citi Paris • Proxy voting GER Citi Frankfurt Country of origin: UK • Compliance monitoring Over 100 years GRE Citi Athens Operating in Europe: • Fund admin services HUN Citi Budapest Senior Executives: • Transfer agency ICE Arion Custody Services Tim Howell (London) • Distribution support IRE Citi Ireland Head of HSBC Securities Services • Transition management ITA Citi Milan Drew Douglas (London) LAT Hansabanka AS, Riga Products/services showing the greatest Global Head of Custody LTU Hansbankus, Vilnius increase in demand in past 12 months: Mike Martin (London) MAL HSBC plc Malta • Hedge fund servicing with collateralized Global Head of Fund Services NED Citi Amsterdam leverage (through Custody Plus) Paul Stillabower (London) NOR Nordea Bank, Oslo • Trade execution with custody Global Head of Business Development, Fund POL Bank Handlowy w Warszawie SA • Shariah compliant products in MENA, Services ROM Citi Bucharest Indonesia and Malaysia Products/services for (further) SER Bank Austria Creditanstalt Business split: custody represents (year end development over the next 12 months: SLO Bank of Austria Creditanstalt dd 2008) <5% of wider organisation revenues. All the above, plus SVK Citi Bratislava Parent’s other main business lines: • Asian global custody SPA Citi Madrid • Personal Financial Services • Middle office services SWE Citi Sweden • Commercial Banking • MENA Fund Services SWI Citi Zurich • Global Banking and Markets • Exchange fraded funds support UK Citi London; Clearstream; Euroclear • Private Banking Domestic markets that are strategically European sub-custody arrangements: JP MORGAN important in the near future: AUT Unicredit Bank AG J.P. Morgan in no particular order: BEL Fortis Bank (Nederland) NV 60 Victoria Embankment •UK BUL ING Bank NV Sofia Branch London EC4Y 0JP • Netherlands CRO Privredna Banka Zagreb dd UK • Luxembourg CYP HSBC Bank plc, Athens Tel: +44 (0)20 7777 2000 • Dublin CZE UniCredit Bank Czech Republic a s Web: www.jpmorgan.com
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Country of origin: USA Services offered in addition to Custody: Country of origin: Switzerland Operating in Europe: 30 years • Securities lending Operating in Europe: Since bank founded. • Equity finance Senior executives: • Cash management Senior executives: Conrad Kozak (New York) Margrit Koch (Zurich) • Collateral management Managing Director, Global Head of Worldwide • Prime brokerage Head Julius Baer Custodian Service Securities Services • Tax reclamation Daniel Marc Waeber (Zurich) Rajen Shah (London) • Commission recapture Head Client Management Julius Baer Custodian Managing Director, Custody Product Executive • Performance attribution Service Francis Jackson (London) • Proxy voting Andreas Barbaric (Zurich) Managing Director, EMEA Business Development • Compliance monitoring Head Business Development Julius Baer Executive • Fund admin services Custodian Service Oliver Berger (Frankfurt) • Transfer agency Michael Bloch (Zurich) Frankfurt Managing Director for Worldwide • Distribution support Head Reporting and Performance Analysis Julius Securities Services Germany, Austria, Switzerland • Transition management Baer Custodian Service and the Nordics • Hedge fund services Business split: n/a Business split: custody represents (year end • OTC derivative independent valuation Parent’s other main business lines: 2008) 12.1% of wider organisation revenues. • Risk measurement (measurisk) • Private banking Parent’s other main business lines: • Custody Connect • Alternative investments • Treasury and securities services • Foreign exchange • Currencies and commodities • Investment bank • Trade execution • Equities • Card services • Derivative collateral management • Fixed income • Retail financial services • Private equity administration services • JB funds • Asset and wealth management • Property administration services • Multi asset class solutions • Commercial banking • Escrow services • Private labelling • Passive currency overlay • Research • Clearance European sub-custody arrangements: • Structured products AUT UniCredit Bank Austria AG plus investment banking and asset management. • Wealth and tax planning BEL Fortis Bank (Nederland) N.V. Products/services showing the greatest • Product development and investment BUL ING Bank N.V. increase in demand in past 12 months: solutions CRO Privredna banka Zagreb d.d. • Pension funds: risk management such as CYP Marfin Popular Bank Ltd. performance measurement and OTC European sub-custody arrangements: CZE UniCredit Bank Czech Republic a.s. AUT Unicredit Bank Austria Creditanstalt valuations DEN Nordea Bank Danmark A/S BEL ING Belgium S.A. • Escrow service EST Swedbank AS BUL Unicredit Bank Austria Creditanstalt • Robust technology & reporting services. FIN Nordea Bank Finland Plc CRO Unicredit Bank Austria Creditanstalt • SRI restriction monitoring FRA BNP Paribas Securities Services SA; CZE Unicredit Bank Austria Creditanstalt • Passive currency overlay Société Générale DEN SEB (Skandinaviska Enskilda Banken) • Transition management GER Deutsche Bank AG EST SEB (Skandinaviska Enskilda Banken) • Long/short strategies, trade execution, GRE HSBC Bank plc FIN SEB (Skandinaviska Enskilda Banken) transfer agency and fund administration HUN Deutsche Bank Zrt FRA Caceis Bank SA Products/services for (further) ICE Islandsbanki hf GER Deutsche Bank AG development over the next 12 months: IRE Bank of Ireland GRE Citibank N.A., London • Asset pooling solution for ITA Intesa Sanpaolo S.p.A. HUN Unicredit Bank Austria Creditanstalt multinational pension funds. LAT Swedbank AS ICE The Bank of New York Mellon • A more robust counterparty exposure LTU AB SEB Bankas monitoring product IRE Citibank N.A. LUX BGL S.A. • Enhanced thought leadership ITA BNP Paribas Securities Services NED BNP Paribas Securities Services S.A. programmes across EMEA LAT SEB Latvijas Unibanka NOR Nordea Bank Norge ASA • Transfer agency: enhanced operating LTU SEB Bank POL Bank Handlowy w. Warszawie S.A. model LUX Kredietbank Luxembourgeoise SA POR Banco Espirito Santo, S.A • J.P. Morgan ACCESS: enhanced NED Citibank International PLC ROM ING Bank N.V. portfolio reporting NOR DnB NOR Bank ASA SVK UniCredit Bank Slovakia a.s. • Extension of local processing capabilities POL Unicredit Bank Austria Creditanstalt SLO UniCredit Banka Slovenija d.d in key European, Middle Eastern, POR Banco Espirito Santo SA SPA Santander Investment, S.A. African and Asian markets ROM Unicredit Bank Austria Creditanstalt SWE Skandinaviska Enskilda Banken AB SVK Unicredit Bank Austria Creditanstalt Nordea Bank AB (publ) SPA Banco Bilbao Vizcaya Argentaria JULIUS BAER SWI UBS AG SWE SEB (Skandinaviska Enskilda Banken) Bank Julius Baer & Co. Ltd. UK JPMorgan Chase Bank, N.A. SWI SIX SIS Ltd. Bahnhofstrasse 36 Deutsche Bank AG UK Citibank N.A. P.O. Box Domestic markets that are strategically 8010 Zurich Domestic markets that are strategically important in the near future: Switzerland important in the near future: • Nordics Tel: +41 (0)58 888 1111 • Eastern European countries • Netherlands Fax: +41 (0)58 888 1122 • Black Sea region • Switzerland Web: www.juliusbaer.com • North African countries
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Services offered in addition to Custody: ITA BNP Paribas Securities Services SA • Fund administration and management • Securities lending LAT Swedbank AS • Family office • Cash management LTU SEB Bankus • Services for independent asset managers • Collateral management LUX ING Belgium SA/NV • Tax reclamation NED Fortis Bank (Nederland) N.V. European sub-custody arrangements: • Performance attribution NOR Nordea Bank Norge ASA AUT Unicredit Bank Austria AG • Proxy voting POL Bank Polska Kasa Opieki SA BEL BNP Paribas Securities Services SA • Compliance monitoring POR Banco Santander de Negocios BUL ING Bank NV, Sofia • Fund admin services ROM ING Bank N.V. CRO Zagrebacka Banka • Transfer agency SVK ING Bank NV Bratislava Branch CYP Citigroup International Plc (Greece) • Distribution support SLO UniCredit Banka Slovenija d.d CZE Ceskoslovenska Obchodni Banka AS • Transition management SPA BNP Paribas Securities Services SA DEN Nordea Bank Danmark A/S SWE Skandinaviska Enskilda Banken AB EST Hansabank Products/services showing the greatest SWI UBS AG FIN Nordea Bank Finland plc increase in demand in past 12 months: UK Northern Trust Company, London FRA BNP Paribas Securities Services SA • Services for fund of hedge funds GER Deutsche Bank AG Domestic markets that are strategically • Custody/reporting for family offices GRE Citigroup International Plc (Greece) important in the near future: Products/services for (further) HUN UniCredit Bank Hungary Zrt. • The Middle East development over the next 12 months: ICE Islandsbanki Hf • Nordic region • Web User Interface (online reporting IRE Euroclear Bank SA • Switzerland tool including performance attribution as ITA BNP Paribas Securities Services well as compliance monitoring). Services offered in addition to Custody: LAT Swedbank AS • Securities lending LTU SEB Bankas NORTHERN TRUST • Cash management LUX KBL European Private Bankers, Northern Trust • Collateral management (formerly Kredietbank S.A. Luxemb.) 50 Bank Street • Tax reclamation NED BNP Paribas Securities Services SA London E14 5NT • Commission recapture NOR Nordea Bank Norge ASA UK • Performance attribution POL Bank Polska Kasa Opieki SA Tel: +44 (0)20 7982 2000 • Proxy voting POR BNP Paribas Securities Services Sa Fax: +44 (0)20 7982 2002 • Compliance monitoring ROM ING Bank NV, Bucharest Branch • Fund admin services Web: www.northerntrust.com SLO UniCredit Banka Slovenija d.d. • Transfer agency SVK Ceskoslovenska Obchodna Banka As Senior executives: • Distribution support SPA Santander Investment S.A. Biff Bowman (London) • Transition management SWE Skandinaviska Enskilda Banken Executive Vice President, EMEA Regional Head Products/services showing the greatest SWI Pictet & Cie Penelope Biggs (London) increase in demand in past 12 months: UK Euroclear Bank SA (UK and Ireland) Executive Vice President, EMEA Business • Custody services for hedge funds Development Domestic markets that are strategically • Collateral management Sue Baines (London) important in the near future: • Fund of hedge funds services Senior Vice President, Head of Global Fund • GCC region Services Sales, EMEA Products/services for (further) • Asia development over the next 12 months: Country of origin: United States • Fund of hedge funds Services offered in addition to Custody: Operating in Europe: 40 years • Outsourcing - ongoing developments • Securities lending • Administration services around • Cash management Business split: custody represents (year end infrastructure and property funds • Collateral management 2008) 60% of wider organisation revenues. • Tax reclamation Parent’s other main business lines: • Commission recapture • Fund administration PICTET • Performance attribution • Asset management (NTGI) Pictet & Cie. • Proxy voting • Wealth management Route des Acacias 60 1221 Geneva 73, Switzerland • Compliance monitoring European sub-custody arrangements: Tel: +41 (0)58 323 23 23 • Fund admin services AUT UniCredit Bank Austria A.G. Web: www.pictet.com • Transfer agency BEL ING Belgium SA/NV • Transition management BUL ING Bank N.V. Senior executives: CRO Bank Austria Creditanstalt A.G. Marc Briol (Geneva) Products/services showing the greatest CYP Citibank International plc Chief Executive Officer, Pictet Custody Services increase in demand in past 12 months: CZE UniCredit Bank Czech Republic a.s. Gilles Paupe (Geneva) • Custody services for third party funds DEN Nordea Bank Danmark A/S Chief Marketing Officer, Pictet Custody Services (also from other banks) EST Swedbank AS • Style analysis FIN Nordea Bank Finland plc Country of origin: Switzerland • Fund unbundling reporting capabilities FRA BNP Paribas Securities Services SA Operating in Europe: Global custody: 30 • Global custody from pension GER Deutsche Bank AG years. Custody: since 1805 funds and other institutions GRE Citibank International PLC Business split: n/d Products/services for (further) HUN UniCredit Bank Hungary Zrt Parent’s other main business lines: development over the next 12 months: ICE NBI hf • Private banking • Enhancements of web platform, IRE Northern Trust Company, London • Institutional asset management securities and data platform.
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PNC GLOBAL SWE Citibank International Plc. CZE UniCredit Bank Czech Republic a.s. PNC Global Investment Servicing SWI Citibank, N.A. DEN Nordea Bank Danmark A/S; Riverside 2, Sir John Rogerson’s Quay UKR JCSB Citibank Danske Bank A/S Grand Canal Dock UK Citibank, N.A. EST Swedbank Dublin 2, Ireland FIN Svenska Handelsbanken; Domestic markets that are strategically Nordea Bank Finland Plc Tel: +353 (0)1 790 3500 important in the near future: Fax: +353 (0)1 790 3510 FRA BNP Paribas Securities Services • Ireland GER Deutsche Bank AG; Web: www.pncgis.com • Luxembourg Bankhaus Metzler Frankfurt Country of origin: USA • Cayman GRE HSBC Bank Plc Greece Operating in Europe: 14 years Services offered in addition to Custody: BNP Paribas Securities Services HUN UniCredit Bank Hungary Zrt. Senior executives: • Securities lending • Cash management ICE Islandsbanki hf. Paul Chi (Wilmington, Delaware U.S.A) IRE RBC Dexia Investor Services Trust; SVP and Senior Managing Director, Custody and • Collateral management • Tax reclamation Bank of Ireland Securities Services Securities Lending Services ITA RBC Dexia Investor Services Bank; • Performance attribution Declan Kehir (Dublin) Banca Popolare Italiana • Proxy voting Head of Custody Operations, Europe BNP Paribas Securities Services; • Compliance monitoring Poina Keogh (Dublin) Capitalia; Intesa sanpaolo S.p.A; • Fund admin services Senior Manager Rasbank • Transfer agency Alan Salmon (Dublin) LAT Swedbank Assistant Manager • Distribution support LTU Swedbank • Transition management LUX ING Belgium S.A. Business split: n/d • Corporate secretarial services NED KAS BANK N.V. Parent’s other main business lines: NOR DnB NOR Bank ASA • Fund accounting and record keeping Products/services showing the greatest increase in demand in past 12 months: POL Bank Polska Kasa Opieki S.A • Securities lending services POR BNP Paribas Securities Services • Middle office services • Exchange traded fund products. Products/services for (further) ROM UniCredit Tiriac Bank S.A. • Corporate secretarial services SVK UniCredit Bank Slovakia a.s. • Transfer agency development over the next 12 months: Current initiatives include: SLO UniCredit Bank Austria AG • PNC International Bank Limited • Further enhancing global custody and SPA RBC Dexia Investor Services España • Foreign exchange services securities lending products SWE Skandinaviska Enskilda Banken AB; Svenska Handelsbanken European sub-custody arrangements: • Increasing global network SWI AIG Private Bank Zürich; AUT Citibank, N.A. • Further enhancing support of exchange Bank Julius Baer; Credit Suisse; BEL Citibank International Plc traded funds Postfinance BOS Bank Austria Creditanstalt AG acting UK RBC Dexia Investor Services Trust; via agent, HVB Central Profit Banka RBC DEXIA Deutsche Bank AG; BUL ING Bank Bulgaria N.V., Sofia RBC Dexia Investor Services The Bank of New York Mellon; CRO Privredna Banka Zagreb d.d. 71 Queen Victoria Street, 4th Floor HSBC Bank Plc CYP Hellenic Bank Ltd. (CY, Larnaca) London EC4V 4DE CZE Citibank Europe plc, org. slozka UK Services offered in addition to Custody: DEN Nordea Bank Danmark A/S Web: www.rbcdexia.com • Securities lending EST AS Hansabank • Equity finance FIN Nordea Bank Finland Plc. Country of origin: UK • Cash management FRA Citibank International Plc. Operating in Europe: as RBC Dexia • Collateral management GER Citigroup Global Markets Investor Services since January 2006 • Tax reclamation Deutschland AG & Co. KgaA (predecessor RBC Global Services since 1986 • Performance attribution GRE Citibank International Plc. and Dexia Fund Services since 1959. • Proxy voting HUN Citibank Europe Plc. Hungarian • Compliance monitoring Branch Office Senior executives: • Fund admin services ICE Kaupthing Bank hf via agent Tony Johnson (London) • Transfer agency Arion Custody Services Global Head, Sales and Distribution • Distribution support Clearstream Banking (fixed income) Simon Shapland (Luxembourg) • Foreign exchange IRE Citibank, N.A. Head, Europe, Sales and Distribution • Risk and investment analytics ITA Citibank, N.A. Business split: custody represents (year end Products/services showing the greatest LAT AS Hansabank via agent Hansabank AS 2008) 27% of wider organisation revenues. LTU AS Hansabank via agent AB Bankas increase in demand in past 12 months: Parent’s other main business lines: • Back/middle office outsourcing solutions Hansabankas Asset Administration by Sector: MAL HSBC via agent HSBC Bank Malta • Improved reporting, with increased • Pension administration 12% frequency and granularity. NED Citibank International Plc • Insurance 9% NOR Nordea Bank Norge ASA • OTC derivatives • Financial institutions 13% • Independent valuation of alternatives POL Bank Handlowy w Warszawie S.A. • Funds 66% POR Citibank International Plc. • Offshore expertise. ROM Citibank Europe Plc. Dublin European sub-custody arrangements: Products/services for (further) SER Bank Austria Creditanstalt AG via AUT UniCredit Bank Austria AG development over the next 12 months: agent UniCredit Bank Serbia JSB BEL ING Belgium SA; • RBC Dexia Online web portal rollout SLO UniCredit Banka Slovenija d.d. Dexia Banque, Bruxelles • Class actions service SVK Citibank Europe Plc pobocka BUL UniCredit Bulbank AD • Derivatives processing platform covering zahranicnej banky CRO UniCredit Bank Austria AG all instruments SPA Citibank International Plc. CYP HSBC Bank plc • Currency overlay for all regions
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CUSTODY DIRECTORY
SEB SGSS STATE STREET SEB Société Générale Securities Services State Street Corporation 106 40 Stockholm 170, place Henri Regnault 20 Churchill Place, Canary Wharf Sweden 92043 Paris - La Défense Cedex London E14 5HJ Web: www.seb.se France UK Tel: +33 (0)1 56 37 37 43 Tel: +44 (0)20 3395 7000 Country of origin: Sweden Web: www.sg-securities-services.com Web: www.statestreet.com Operating in Europe: 100 years Country of origin: France Country of origin: United States Senior executives: Operating in Europe: As SGSS, five years Operating in Europe: more than 35 years Göran Fors (Stockholm) (as Société Générale for 144 years). Global Head Of Custody Services Senior Executives: Mikael Kimander (Stockholm) Senior Executives: James S. Phalen (London) Head of Business Development Global Custody Alain Closier (Paris - La Défense) Executive Vice President Ulf Noren (Oslo) Global Head, Société Générale Securities Services Stefan Gmür (Munich) Head of Sub Custody Client Relations Bruno Prigent (Paris - La Défense) Executive Vice President Deputy Head, Société Générale Securities Services Steven Smit (London) Business split: custody represents (year end Etienne Deniau (Paris - La Défense) Senior Managing Director 2008) 4.5% of wider organisation revenues. Head of Custody Trustee Services for Société William Slattery (Dublin) Parent’s other main business lines: Générale Securities Services Executive Vice President • Retail Sebastien Danloy (Paris - La Défense) • Asset management Business split: custody represents (year end Global Head of Sales and Global Relationship • Trading and capital carkets 2008) 85% of wider organisation revenues. Management, Société Générale Securities Services European sub-custody arrangements: European sub-custody arrangements: AUT RZB ITA Intesa Parent’s other main business lines: AUT UniCredit Bank AUT AG • Retail banking BEL KBC LAT SEB BEL Deutsche Bank AG, Netherlands (via BUL Unicredit LTU SEB • Specialized financial services Amsterdam, support from Brussels) CRO Unicredit LUX SEB • Global investment management and BUL ING Bank N.V. CYP HSBC NED Fortis services CRO Privredna Banka Zagreb d.d. CZE Citi NOR SEB • Corporate and investment banking CYP BNP Paribas Securities Services, S.A., DEN SEB POL ING Domestic markets that are strategically (via Athens branch) EST SEB POR Millenium important in the near future: CZE Ceskoslovenská obchodní banka, a.s. FIN SEB ROM Unicredit • Luxembourg DEN SEB (via Copenhagen branch) FRA BNP SLO Unicredit • Germany EST AS SEB Pank GER SEB SVK Unicredit • Emerging markets FIN SEB (via Helsinki branch) GRE BNP SPA BNP FRA Deutsche Bank AG, Netherlands (via HUN Citi SWE SEB Services offered in addition to Custody: Amsterdam, support from Paris) ICE Glitnir SWI CS • Securities lending GER Deutsche Bank AG IRE HSBC UK HSBC • Equity finance (SGCIB) GRE BNP Paribas Securities Services, S.A. • Cash management HUN UniCredit Bank Hungary Zrt Domestic markets that are strategically • Collateral management ICE New Kaupthing Banki hf. important in the near future: • Prime brokerage (Newedge) IRE Bank of Ireland • Russia • Tax reclamation ITA Deutsche Bank S.p.A. • China • Commission recapture LAT AS SEB Banka • Brazil • Performance attribution LTU AB SEB Bankas Services offered in addition to Custody: • Proxy voting NED Deutsche Bank AG • Securities lending • Compliance monitoring NOR SEB (via Oslo branch) • Equity finance • Fund admin services POL Bank Handlowy w Warszawie S.A. • Cash management • Transfer agency POR Banco Comercial Português S.A. • Collateral management • Distribution support ROM ING Bank N.V. • Prime brokerage • Transition management SLO UniCredit Banka Slovenija d.d. • Tax reclamation • Risk measurement SVK Ceskoslovenská obchodna banka, a.s. • Proxy voting • Pricing/middle office of OTC products SPA Deutsche Bank S.A.E. • Compliance monitoring • Middle office of listed instruments SWE Skandinaviska Enskilda Banken AB • Fund admin services • Global fund trading SWI UBS AG; Credit Suisse • Transfer agency • Class actions UK State Street Bank & Trust Company • Distribution support • Clearing • Issuer services Domestic markets that are strategically Products/services showing the greatest important in the near future: increase in demand in past 12 months: Products/services showing the greatest •UK • Fund administration increase in demand in past 12 months: • Germany • Compliance and risk mitigation services • OTC derivatives middle office/pricing • France • Securities lending Services offered in addition to Custody: Products/services for (further) Products/services for (further) • Securities lending development over the next 12 months: development over the next 12 months: • Equity finance • Transition management • Global fund distribution • Cash management
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• Collateral management Services offered in addition to custody: DEN SIS SegaInterSettleAG, Zurich • Tax reclamation • Securities lending (Nordea Bank Denmark A/S) • Commission recapture • Equity finance EST SIS SegaInterSettleAG, Zurich • Performance attribution • Cash management (Nordea Bank Finland, Helsinki) • Proxy voting • Collateral management FIN SIS SegaInterSettle AG, Zurich • Compliance monitoring • Tax reclamation (Nordea Bank Finland Plc) • Fund admin services • Commission recapture FRA SIS SegaInterSettle AG, Zurich • Transfer agency • Performance attribution (BNP Paribas, Paris) • Distribution support • Proxy voting GER SIS SegaInterSettle AG, Zurich • Transition management • Compliance monitoring (Clearstream Banking Frankfurt AG) • Derivative servicing • Fund admin services GRE Citibank Athens • Hedge fund servicing • Transfer agency HUN Citibank, Budapest • Network management • Distribution support IRE SIS SegaInterSettle AG, Zurich • Middle-office outsourcing • Transition management (Bank of Ireland, Dublin) • Risk analytics ITA BNP Paribas Securities Services Milan • Pension pooling Products/services showing the greatest LAT SIS SegaInterSettle AG, Zurich • Trade execution increase in demand in past 12 months: (Nordea Bank Finland, Helsinki) • Compliance monitoring LTU SIS SegaInterSettle AG, Zurich Products/services showing the greatest • Collateral management (Nordea Bank Finland, Helsinki) increase in demand in past 12 months: • Fund admin LUX Clearstream Bank Luxembourg • Management of counterparty exposure Products/services for (further) NED SIS SegaInterSettle AG, Zurich • Collateral management development over the next 12 months: (Citibank International Plc) • Valuations • Strengthen domestic offering in Sweden NOR SIS SegaInterSettle AG, Zurich Products/services for (further) and the Baltics. (Den Norske Bank ASA, Oslo) development over the next 12 months: • Be even more local. POL SIS SegaInterSettle AG, Zurich • Hedge funds: custody, admin, client • Newly established business line with (Bank Handlowy W Warszawie) reporting and collateral management focus on whole chain of Fund Services. POR BCP Millennium, Lisbon ROM Bank Austria Creditanstalt, Vienna SWEDBANK UBS (UniCredit Tiriac Bank, Bucharest) Swedbank AB (Publ) UBS AG SLO Bank Austria Creditanstalt, Vienna SE-10534 Stockholm, Sweden Bahnhofstrasse 45, P.O. Box (UniCredit Banka Slovenija d.d.) Tel: +46 8 5859 0000 8098 Zurich, Switzerland SPA Citibank Madrid, Spain Web: www.swedbank.se and at SWE SIS SegaInterSettle AG, Zurich Aeschenvorstadt 1, P.O. Box Country of Origin: Sweden (Skandinaviska Enskilda Banken) 4051 Basel, Switzerland Operating in Europe: 20 years SWI SIS SegaInterSettle AG, Zurich Web: www.ubs.com UK SIS SegaInterSettleAG, Zurich Senior Executives: (BNP Paribas, London) Ola Laurin (Stockholm) Country of origin: Switzerland Head of Securities Services Operating in Europe: Global Custody Domestic markets that are strategically since 1999; pre-merger banks since 1965. Tomas Lundmark (Stockholm) important in the near future: • Europe Head of Sales, Securities Services Senior Executives: Neal Meacham (Stockholm) Francesco Morra and Jürg Zeltner (Zurich) • APAC region Head of Client Relations, Securities Services Head Wealth Management and Swiss Bank • Middle East Henrik Staffas (Stockholm) Stephan Zimmermann (Zurich/Basel) Services offered in addition to Custody: Head of Fund Services, Securities Services Chief Operations Officer • Securities lending Business Split: custody represents (year end Josef Landolt (Zurich) • Performance attribution 2008) 2% of wider organisation revenues Head Securities Services • Proxy voting Parent’s other main business lines: Endo Baumgartner (Zurich) • Cash management • Swedish and Baltic banking Head Global Custody • Compliance monitoring • Collateral management • International banking Parent’s other main business lines: • Fund admin services • Swedbank markets • UBS Global Asset Management • Prime brokerage • Asset management & Insurance • UBS Investment Bank • Transfer agency * • Shared services • UBS Wealth Management & Swiss Bank • Tax reclamation • UBS Corporate Centre European sub-custody arrangements: • Distribution support We use JP Morgan as a global custodian and European sub-custody arrangements: • Commission recapture leverage their network of sub-custodians. (Local agents in brackets, as applicable) • Transition management In addition, in line with our ambition of AUT SIS SegaInterSettle AG, Zurich • Detailed reporting incl. online tools being a CEE gateway, we have appointed (Oesterreichische Kontrollbank AG) sub-custodians in the following CEE markets: * only if fund admin services provided by UBS BEL SIS SegaInterSettle AG, Zurich Estonia, Latvia, Lithuania, Bulgaria, Bosnia Fund Management Switzerland. (BNP Securities Services, Brussels) and Herzegovina, Croatia, Czech Republic, BUL Bank Austria Creditanstalt, Vienna Products/services showing the greatest Hungary, Kazakhstan, Macedonia, (HVB Bank Biochim, Sofia) increase in demand in past 12 months: Montenegro, Poland, Romania, Russia, CRO Bank Austria Creditanstalt, Vienna • Online reports and real-time figures Serbia, Slovak Republic, Slovenia, Ukraine. (Zagrebacka Banka, Zagreb) Products/services for (further) Domestic markets that are strategically CYP Citibank, Athens development over the next 12 months: important in the near future: CZE SIS SegaInterSettle AG (Zurich • Enhanced web reporting platform • Middle East (not country specific) (Citibank, Prague) • Introduction of on-demand pdf reports
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