The primary activity involved in custodian banking is the safekeeping and administration of securities. A custodian bank holds and transfers securities on behalf of its customers with whom it has custody agreements.
In exchange for storing and managing securities, custodian banks normally charge custody fees. These custody fees compensate banks for the services which they provide.
While custodian banks originally catered to investors looking for a secure place to store their paper security certificates, custodian banks today primarily manage electronic certificates on behalf of investors. The bank facilitates the transfer of securities to other custody accounts (when a trade is performed, for example).
When securities are only available in electronic form and not as paper certificates, it is often impossible to hold those securities without making use of custodian banking services.
Only a handful of Swiss custodian banks do not charge custody fees. You can find the custody fees of Swiss custodian Banks listed in the moneyland.ch securities broker comparison.
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