Depository service is a type of commercial services that are associated with the storage of securities, as well as with operations to change their owner. An organization that has a license to carry out depository activities enters into an agreement with a shareholder who transfers its assets to it for storage. Bank deposits, as well as investments, have nothing to do with custody services, despite the fact that these concepts are consonant.
What do custody services mean?
Securities custody
According to the depositary agreement, the shareholder who wishes to transfer his securities to the depository organization is assigned an individual account in the same way as is done with ordinary settlement and savings accounts. Only securities in this case are credited to the account, and not cash. And the unit of measure here is precisely certain assets, and not a specific amount of currency. Banking services for legal entities are now the most diverse.
The shareholder has the right to manage his account, as well as the assets stored on it, as he sees fit. This can be done using a special interface, as well as software that is provided by the depository organization. These transactions also bear great resemblance to those carried out with respect to ordinary accounts. What are the service rates?
Payment to the address of the organization providing the depository services is carried out in proportion to the number of days during which the securities account was opened. This is about 0.12% per annum, at least 10 rubles per day. There is no charge for storing assets whose circulation has expired. For example, opening a new account for a nominee holder will cost approximately 10,000 rubles. For each operation, on behalf of the depositor (the person who made the deposit), a fee of 150 to 800 rubles is charged, depending on its type.
Depository Services
Depository services for individuals and legal entities include:
- opening and servicing an account;
- registration of ownership rights to various kinds of securities and their storage;
- depository transfers of these assets at the request of the client, as well as transfers of bills;
- registration of pledged securities for guarantees, as well as loans;
- accounting of securities on trading operations conducted through a broker;
- encumbrance of bills or removal of such an encumbrance that is carried out in order to ensure property transactions;
- payment of profit on securities;
- redemption of securities coupons;
- other services that may be related to account management.
Benefits of Depository Services
These benefits include:
- the possibility of unhindered depositary transfers to any region of the country;
- a wide range of securities;
- storage reliability;
- reduced maintenance costs.
Depository services to individuals suggest that customers have the right to issue securities as collateral for obtaining bank guarantees or loans.
About securities
In order to ensure the fulfillment of any obligations related to loans and bank guarantees, the following securities are accepted - promissory notes, savings, as well as certificates, shares, assets of constituent entities of the Russian Federation and municipalities, corporate issuers and credit organizations, as well as ordinary shares of OJSC NK “ Lukoil, OJSC NK Rosneft, OJSC Rostelecom, OJSC Gazprom, RAO UES of Russia, OJSC Surgutneftegas, OJSC MMC Norilsk Nickel and others.
Services of banks that are provided to legal entities
Banking services for legal entities differ significantly from those that can be provided to individuals. Their difference lies in the very nature of economic relations and participants in financial turnover. On the one hand, the range of services for organizations and companies is much wider than for citizens, and on the other, responsibility here is much higher. These services include:
- Lending. Loans are the most convenient way out for those entrepreneurs who experience significant financial difficulties when purchasing any movable property, equipment or real estate to carry out their business tasks. The parameters and forms of granting loans to them can also vary significantly, it depends on the level of relationship between the bank and this organization, on the form of ownership and on the scope of activity of a particular entrepreneur.
- Deposit services. In this area of banking services, there are also differences between deposits for individuals and legal entities. Deposits mean the accrual of interest on the free funds of a legal entity, and additional conditions for such accruals are usually negotiated in advance with each specific client of the bank. Depositary service is very convenient.
- Maintenance of current accounts. This service may not be single, but even complex. When servicing the accounts of organizations, it implies a high speed of settlement and monetary transactions, as well as their high quality. This area includes a service to optimize cash management operations.
- Service as well as issue of plastic cards. Usually this service involves the maintenance of so-called payroll accounts.
- Investment. The client of the bank in this case can be both an investor and an investee.
- Factoring services. They provide for the transfer of financial resources to an enterprise that is a client of the bank, in exchange for the right to demand from the debtor (third party) the transfer of goods, services, debt recovery. However, the debtor is entitled to a deferred payment. This service is very convenient for those enterprises for which this is standard practice.
- A variety of operations related to documents. These may be international operations conducted in order to minimize the risks arising from the implementation of foreign economic activity.
- Collection. This service consists in timely transportation, as well as the safety of cash or other valuables.
Reviews
In addition to these services, the bank provides legal entities with audit services for their financial activities, as well as the opportunity to act as a guarantor or intermediary of transactions, and provides the right to participate in auctions. Thus, before choosing a partner, you need to analyze the activities of a banking organization and evaluate how convenient depositary services are. Judging by customer reviews, custody services have many advantages. You can receive, verify, transfer income on securities, store them, open and maintain accounts, much more. Customers are guaranteed safety and respect for their rights.