Mutual fund custodian

Mutual fund custodian,

Definition of Mutual fund custodian:

  1. A firm that holds the securities and other financial instruments owned by a mutual fund.

  2. A mutual fund custodian is a trust company, bank, or similar financial institution that is responsible for holding and safeguarding the securities owned within a mutual fund. A mutual fund's custodian holds assets for safekeeping and can also provide a range of services including fund administration, fund accounting, legal, compliance, tax support and transfer agency services.

  3. Mutual fund custodians work with mutual funds through third party arrangements. Since a mutual fund is essentially a large pool of funds from many different investors, it requires an additional entity to hold and safeguard the securities that are mutually owned by all the fund's investors.

How to use Mutual fund custodian in a sentence?

  1. In addition to holding securities and record-keeping, a custodian also typically offers trade settlements, foreign exchange transactions, and tax services for its clients.
  2. While a fund's portfolio manager makes trading decisions, the securities owned by the fund are held with the custodian and not directly with the fund itself. This is done to reduce the risk of fraud.
  3. Mutual fund custodians are responsible for securing and managing the securities held within a mutual fund.

Meaning of Mutual fund custodian & Mutual fund custodian Definition