Recently, many banks provideservices for the storage and accounting of client securities. This is the depository activity of credit institutions. Moreover, document and non-documentary, issue and non-issuance securities can act as an object. The main thing is that all of them have legal force and be drawn up in accordance with the norms of current legislation.
Depository activities in the securities marketimplies the presence of various accounting institutions: those that would be engaged in the storage of documents, and those that would keep a single register, fixing the owners of payment documents. The activities of such organizations make it easy to confirm the presence or absence of rights to a particular security. There are companies that provide services exclusively for the storage of securities. In this case, there can be no talk of depository activity, since it necessarily includes accounting and confirmation of the rights of the owner.
In addition, depository activities inorganizations are constantly being improved, for example, a number of additional services are introduced that accompany the main activities. These include assistance in the sale of securities for the benefit of the owner or control and regulation of the process of paying dividends on shares. The provision of a related service must be indicated in the contract with the client, which will be evidence of the consent of one party to engage in the specified list of operations, and the other to pay for it.
Among the total mass of related services can be identified the most common:
- Account management for operations with payment documents and control over the movement of funds.
- Settlements on the transit and foreign currency account, if transactions with securities are conducted in foreign currency.
- The distribution of interest income, for example, dividends on shares.
- Verification of certificates of securities and the establishment of their authenticity.
- At the request of the client, these certificates are collected and then transported to the destination.
- If it comes to joint stock companies, thenA credit institution may represent the interests of its client at a general meeting of shareholders, and in some cases make decisions that are as beneficial as possible for the client.
- Development of specific measures to maximize the profit of the owner of the securities through the effective use of his rights.
- Providing consulting services in the field of investment activity of the customer and relations with tax authorities.
- Other activities aimed at meeting the requirements of the consumer group and not contrary to current legislation.
Custody activity is actively used onsecurities market, and the participant in the relationship, carrying it out, is called the depositary. It must be a legal entity and have a specialized license giving the right to conduct a certain type of operations. Depositary activities comply with certain requirements, standards and regulations that should not be hidden from the public. They are available for review to any natural or legal person, as provided on his first request.
The client of the depositary companyactivity in the language of specialists is called the contributor. Moreover, the bank can also be a depositor if bank securities are stored and accounted for by an outside organization. After all, when a credit institution conducts large-scale operations in the securities market, a large burden is imposed on employees, which distracts from the main activity. That is why the management team may decide on the feasibility of introducing an additional item of expenditure on the services of an outside organization.
