A custodian acts as a guard for the securities from loss or theft

In the stock market, a custodian means a trustee who keeps and protects your securities. These trustees can be any financial institution, banks, law firms or accounting firms. They hold the securities in electronic form. They also perform other activities related to securities like account administration, collection and distribution of dividend and interest etc.

A custodian can be an institution or an individual that act as an agent and exercise the legal authority over the securities. Other than security service, a custodian generally manages the accounts handling, tax administration or transactional settlements.

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