Global Custody Agreement Definition

Global custody agreement, also known as a custody service agreement, is a legal document between financial institutions and their clients that outlines the terms and conditions of the custody services provided. These services typically involve the safekeeping and administration of financial assets such as securities, cash, and other instruments.

Global custody agreements are designed to protect the interests of both the financial institution and the client. They establish the rights and responsibilities of each party and define the scope of the custody services being offered. This can include services such as settlement, corporate action processing, income collection, and reporting.

One of the primary benefits of a global custody agreement is the assurance it provides to clients that their assets are secure and being managed in a responsible manner. Financial institutions that offer custody services typically have extensive operational and risk management frameworks in place to ensure the safety and integrity of client assets.

Global custody agreements also typically include provisions for liability and indemnification, which protect both parties in the event of a breach of contract or other legal dispute. They may also include provisions related to the termination of the custody agreement, such as notice requirements and the transfer of assets.

Overall, global custody agreements are an essential component of the financial services industry, providing clients with the peace of mind that comes with knowing their assets are being managed by a reputable institution with a strong track record of success. Whether you are a large institutional investor or an individual with a modest portfolio, a global custody agreement can provide the protection and security you need to achieve your financial goals.

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