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Thomas Murray helps institutional investors manage the quality, costs and risks of the post-trade services they must employ when they buy, sell and hold securities and other financial assets in multiple markets around the world. The first of the three principal ways in which the firm assists its clients to do this is by monitoring the performance of the three main groups of service providers to institutional investors: custodian banks, fund administrators and the infrastructure of depositories, clearing houses and payments systems the custodian banks and fund administrators must use to hold assets on behalf of investors, and settle transactions in those assets.
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Custodian banks are responsible for the settlement of transactions in securities and other financial assets, and the safekeeping and servicing of those assets. Safekeeping and servicing means securing good title to the assets and holding them safely until they are sold, collecting income payments and other entitlements due on them, reclaiming withholding taxes where necessary, processing corporate actions affecting them such as rights issues and takeovers, and exercising on behalf of investors the voting rights attached to the assets. Subscribers to the custodian bank monitoring service offered by Thomas Murray receive continuously updated information about the fees, transaction costs and risks they are incurring with their custodian banks, including performance against agreed service levels and comparable service providers.
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Fund administrators are responsible for the valuation of the shares or units that investors own in collective investment funds, and for the management of transactions in those shares or units. The first of the two principal responsibilities of the fund administrator is the calculation of the Net Asset Value (NAV), or price at which the shares or units are bought, sold or redeemed, or transferred to another fund. It is calculated by adding up the sum of the values of the underlying assets held by a fund, and subtracting any management and service fees and other liabilities owed to third parties. The second of the two principal responsibilities of the fund administrator is the maintenance of records of investors and their holdings, including their contact details and the management of queries from them, and the processing of orders to buy, sell or redeem, or transfer units to another fund. These services are generally known as transfer agency (in the retail markets) or investor services (in the institutional markets). Subscribers to the fund administrator monitoring service offered by Thomas Murray receive continuously updated information about the valuation sources and methodologies used by their fund administrators, the fee deductions and other costs they charge to the fund, and the registration procedures they use to ensure that holdings are always recorded and maintained accurately and promptly.
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Market infrastructure is a collective term for the institutions that banks and fund administrators use to hold assets or records of assets on behalf of investors, and to exchange assets for cash payment when they are bought or sold. The exact combination of institutions varies widely around the world, and in many markets there is more than one of each, but the market infrastructure institutions are of three main types. The first is a central securities depository (CSD), which almost all markets now have. These hold physical securities, or records of them in digital form, which facilitates their exchange by electronic book entries. The cash payment is usually made between accounts at the central bank. The second main type of market infrastructure institution is a central counter-party (CCP). This stands between the parties to all transactions, reducing counter-party risk through a combination of capital subscribed by users, collateralisation by users, and insurance policies. This enables anonymous trading, and the further reduction of risk by netting transactions between the same counterparties to a single cash payment or delivery of securities. The third type of market infrastructure institution is a payments system. These institutions, which facilitate the transfer of money between bank accounts, are responsible for the delivery and receipt of cash. Subscribers to the market infrastructure monitoring service offered by Thomas Murray receive continuously updated information about CSDs, CCPs and payment systems to which they are exposed, plus information about the evolving corpus of law, regulation, taxation and market practices in all markets where they are invested.
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