Effective network management plays a critical role in safeguarding client assets. At RBC Dexia Investor Services our network management department is responsible for ensuring all our subcustodians provide us with the expected quality of service, at all times and in accordance with all our service level standards and contractual agreements.

The global investment market is constantly evolving and we continually assess new markets, working closely with our clients to ensure that we are aware of countries or regions that are becoming new investment targets.

The market information that we provide to our clients is supplied to us by our subcustodians in each market. The information is provided to supplement and not replace the independent investment decisions and investment risk assessments carried out by clients themselves in advance of entering new markets. All clients should first ensure they are aware of and comfortable with any risks inherent in and regulations governing investing in all global markets as these may relate to them.

Why subcustodians matter

Subcustodian banks are appointed by global custodians to hold clients’ assets on their behalf in markets where they do not have either their own capabilities or a presence of their own. Consequently, the subcustodian bank plays an extremely important role in the safeguarding of those assets on behalf of the global custodian. As a truly global provider, our network management department manages the entire subcustody network of RBC Dexia Investor Services out of three locations – London, Toronto and Singapore with our network services team based in both London and Luxembourg. From the appointment of carefully selected subcustodians to day-to-day monitoring of services, network management stays close to both our clients and subcustodians to ensure the most competitive services.

Best of breed approach

Ensuring the safeguarding of clients assets is the basic principal which underpins the selection process for subcustody appointment. We employ a best of breed approach to the short listing and selection of subcustodians. This allows us to select the best subcustodian regardless of business obligations or reciprocity issues.

Our top four considerations when selecting a subcustodian are:

• Minimum credit rating – all subcustodians must comply with our minimum industry credit ratings.
• Minimum shareholder equity – all subcustodians must confirm that they meet our minimum appointment criteria, this is based on regulatory guidelines and internal policy.
• 17f-5 qualified foreign bank – all subcustodians must confirm compliance with 17f-5; regulated by a country’s government.
• Mandatory Provident Fund Schemes Authority - all subcustodians must be recognised as an authorised intermediary by the Hong Kong Mandatory Provident Fund Authority.

We also monitor credit and capital adequacy requirements on an ongoing basis to ensure compliance with minimum regulatory and internal requirements. Monitoring of these requirements is undertaken by network management in partnership with our credit and risk management departments.

Learn more:

• Continuous Risk Assessment
• Subcustodian monitoring & performance review