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Glossary

Custodian Bank

A Custodian Bank (also referred to simply as a custodian) is a financial institution that holds securities and other assets on behalf of clients, maintains accounts, settles transactions, and provides custody statements. It does not take investment decisions. Swiss custodian banks are subject to the Banking Act (BankG). In independent asset management, the custodian is deliberately kept separate from the manager: client assets are held at a custodian bank of the client's choice, while the manager holds only a limited trading authority and has no direct control over the assets themselves.

At a glance

01

A custodian bank holds assets but does not take investment decisions; custody and management are deliberately separate functions.

02

Swiss custodian banks are governed by the Banking Act (BankG), with strict requirements on capital, liquidity, and bookkeeping.

03

In independent asset management, the client is free to choose their custodian bank; the manager receives only a limited trading authority.

04

An asset manager can use several custodian banks simultaneously for one mandate, for example one for liquid and one for illiquid positions.

Frequently asked questions

The Custodian Bank holds assets, settles transactions, and maintains accounts, but does not decide on purchases or sales. The asset manager holds the mandate, develops the investment strategy, and implements it. Both roles are regulated separately, which structurally limits conflicts of interest.
Yes. With an independent asset manager, the choice of Custodian Bank rests with the client. The manager typically recommends suitable institutions but is not tied to its own custodian relationships. This strengthens independence and makes it possible to select a custodian based on criteria such as costs, product range, or domicile.