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Portfolio Custodian

A portfolio custodian is a CMB-authorised institution that holds an investment fund’s assets separately from the founder and oversees the fund’s transactions for regulatory compliance. The communiqué defines the custodian as an institution authorised under Article 56 of Capital Markets Law 6362 to provide portfolio custody services.
Contents
  1. 1.Key points
  2. 2.How it works
  3. 3.Interpretation
  4. 4.Pitfalls
  5. 5.Official sources
  6. 6.Frequently asked questions

Key Points

  • The fund’s cash and securities are held with the custodian in the fund’s name, which separates them from the founder’s own assets.
  • The custody structure is one of the key safeguards keeping fund assets ring-fenced for investors even if the founder runs into trouble.
  • custody does not protect market value; price falls or liquidity problems are outside its scope.

How It Works

the custodian records the fund’s assets, checks that the founder’s instructions comply with regulation and the prospectus, and oversees the unit price calculation. It is jointly responsible with the founder for refunding any excess over the total expense cap.

Interpretation

The custody structure is one of the key safeguards keeping fund assets ring-fenced for investors even if the founder runs into trouble. In liquidations, asset sales and payments are carried out for unitholders thanks to this separation.

Pitfalls

custody does not protect market value; price falls or liquidity problems are outside its scope. Segregation does not guarantee how quickly or at what price assets can be sold.

Official Sources

Official regulation and sources the definition is based on.

Pages Where This Term Appears

Related Terms

Frequently Asked Questions

A portfolio custodian is a CMB-authorised institution that holds an investment fund’s assets separately from the founder and oversees the fund’s transactions for regulatory compliance.

the custodian records the fund’s assets, checks that the founder’s instructions comply with regulation and the prospectus, and oversees the unit price calculation. It is jointly responsible with the founder for refunding any excess over the total expense cap.

Prepared by: Yatırımcı.AI Research TeamLast reviewed: Method: MethodologyEditorial policy