Sub-custody survey 2017 methodology

Sub-custody survey 2017 methodology

All users of the services of sub-custodians (agent banks), from broker-dealers to global custodians, are asked to rate their performance.

Respondents are asked to rate sub-custodians in all countries in which they operate. The performance of sub-custodians is rated separately in each country and published in the April/May issue.

Respondents are asked to rate their sub-custodians across 12 service categories (see list below). Respondents are permitted to rate up to 10 sub-custodians in each country.

For each country there will be two tables: unweighted and weighted. The weighted table allows for assets under custody as well as how important the respondents consider a certain category to be.

Unweighted table

For each country, all valid responses for each sub-custodian are averaged to calculate an unweighted score.

Weighted tables

Step one: weighting by assets under custody.

Weighted versions of all unweighted tables are produced.

First, an allowance is made so that a greater weight is given to the views of larger respondents, defined by their assets under custody (AuC).

Respondents are asked to choose a band that reflects the size of their AuC in billions of US dollars. The boundaries of each band are determined by the AuC of respondents to last year’s survey. They are chosen so an approximately equal amount of respondents fit into each band.

A weighting is attached to each band as follows:

  • <$100bn                       0.6
  • $100bn$200bn        0.8
  • $200bn$500bn        1
  • $500bn$1000bn      1.2
  • >$1000bn                     1.4

Each respondent’s unweighted rating of a sub-custodian is then multiplied by the appropriate weighting. For example, if a global custodian with assets under custody of $567bn gives a sub-custodian an average score of 6.7, its contribution to the weighted score is 6.7 x 1.2 = 8.04. This weighted rating is then averaged with all other respondents’ weighted ratings.

Where a figure for assets under custody is not disclosed a default weighting of 1 is assigned.

Step two: weighting by category importance

Respondents are asked to rank the importance of each of the service categories. These respondent rankings are then averaged. These average ranks are then used to create a weighting for each service category, which theoretically could range between zero and two but will depend on the actual responses. The average weighting is one to preserve comparability with unweighted scores.

For clarity, if on average respondents consider ‘relationship management’ to be the most important category, it will be given the greatest weighting when calculating scores in the weighted by importance tables.


Qualification is on a country-by-country (rather than regional) basis. To qualify in each country, a sub-custodian needs to receive a minimum of three responses per market

If a sub-custodian is rated multiple times by the same respondent firm in the same country the ratings will be averaged and will only count as a single response for the purposes of qualification.


Sub-custodians are rated across 12 main categories, of which some are divided up into sub-categories. The 12 main categories have equal weight. Where a main category is split into sub-categories, an average of the sub-categories is taken to produce the score for the main category.

The categories are as follows:

  1. Settlement
    • Efficiency of pre-settlement matching and reporting
    • Failed trade management
    • Timeliness, accuracy and completeness of reporting
    • Competitiveness of cut off times
  2. Safekeeping
  3. Income collection
    • Timeliness, accuracy and completeness of notifications
    • Timeliness, accuracy and completeness of confirmations
  1. Corporate actions
    • Timeliness, accuracy and completeness of notifications
    • Timeliness, accuracy and completeness of confirmations
    • Competitiveness of response cut off times
  2. Client service
    • Quality of subject matter expertise
    • Responsiveness and effectiveness of enquiry management
    • Availability and calling frequency
  3. Reporting capability
    • Flexibility of delivery channels
    • Quality and timeliness and of SWIFT and other reporting
  4. Tax reclaim services
    • Solicitation of timely tax documentation
    • Quality of reporting
  5. Market information
    • Relevance of marketing information
    • Timeliness of market information
  6. Relationship management
    • Understanding of your business needs
    • Ability to set up new products when requested
    • Quality of subject matter expertise
    • Responsiveness and effectiveness of enquiry management
    • Availability and calling frequency
  7. Securities lending fail coverage
  8. Regulatory expertise and capability
  9. Product development and innovation





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