A custodian is legally responsible for ensuring that an item or person is safe and secure. In investment terms, a custodian is the financial services company that maintains electronic records of financial assets or has physical possession of specific securities.
The custodian's client may be another institution, such as a mutual fund, a corporation, or an individual. For example, with an individual retirement account (IRA), the custodian is the bank, brokerage firm, or other financial services company that holds your account.
Similarly, the Depository Trust Company, a subsidiary of the Depository Trust and Clearing Corporation (DTCC), is the custodian of millions of stock certificates held in its vaults.
- Browse Related Terms: Audit, Banking day, Consumer Reporting Agency, Correspondent, custodian, Direct Dispute, Financial Accounting Standards Board (FASB), Gift, Lender, Remittance Transfers, Safe (or Safety) Deposit Box
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