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Is depository same as custodian?

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A comparison between a depository and a custodian can be seen in the table below;

Depository Vs Custodian

Depository

Custodian

A Depository is an institution that:

  • Holds financial securities (like shares, debentures, and mutual funds) in an electronic form,
  • Enables clearing and settlements for these securities, and
  • Facilitates transfers of these securities

A Custodian is a bank or a financial institution that only holds financial securities (like stocks, bonds, gold) for safekeeping.

It has custody and legal ownership of the financial securities it holds.

It does not have legal ownership of the securities it holds.

Custody is one of the functions of a Depository.

Custody is the sole function of a Custodian.

Every Depository is a Custodian.

Every Custodian is not a Depository.


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