Meaning and transaction use
An SEC-filed disclosure describes custodian responsibilities including safeguarding cash and securities, receipt and delivery, income collection, books, cash posting and trade recording. [S1]
An SEC-filed global custody agreement describes market settlement mechanics and separate cash and securities account entries pending actual receipt. [S2]
Proposed control method: reconcile positions and cash by account, market and legal entity and maintain a separate register for assets outside custody.
Worked example
Illustrative custody reconciliation only. Assume the family-office ledger shows 52.4 million, the custodian statement shows 52.1 million and documented unsettled purchases account for 0.25 million.
Scroll the table horizontally to view all columns.
| Measure | Calculation | Result |
|---|---|---|
| Gross difference | 52.4 - 52.1 | 0.30m |
| Unsettled purchase timing | Given | 0.25m |
| Unexplained difference | 0.30 - 0.25 | 0.05m |
| Unexplained percentage | 0.05 / 52.4 | 0.10% |
The illustrative reconciliation leaves 0.05 million unexplained after the documented settlement timing item.
Proposed transaction review process
Define scope
Map entities, accounts, markets, assets and sub-custodians.
Set instructions
Approve authorised parties, cash, settlement and access controls.
Reconcile
Compare positions, cash, income, actions and unsettled trades.
Monitor service
Review breaks, incidents, market coverage, fees and controls.
Evidence checklist
Agreement
Services, liability, sub-custody and reporting terms.
Accounts
Cash and securities statements by entity and currency.
Transactions
Instructions, confirmations, settlement and corporate actions.
Controls
Authorisations, reconciliations, exceptions and service reports.
Decision framework
| Situation | Proposed action |
|---|---|
| An asset is outside custody | Record ownership, valuation and control separately. |
| A settlement fails | Track exposure, notification and resolution. |
| A market requires a sub-custodian | Review agreement coverage and country risk. |
| A break remains unexplained | Escalate under the reconciliation policy. |
Common errors to check
- Treating custody as investment management.
- Assuming every asset is held by the custodian.
- Ignoring unsettled trades.
- Failing to reconcile legal entities and currencies.
Reconcile the custody structure
Bring custody agreements, accounts and asset registers to a custody review. Reconcile coverage, controls and statement breaks.
Discuss the transactionPrimary references and editorial scope
- SEC filing: Custodian responsibilities
Example safeguarding, settlement, income collection, books and cash-record responsibilities. Reference checked 17 September 2026. - SEC filing: Global custody settlement mechanics
Example transaction settlement and cash and securities account entries pending actual receipt. Reference checked 17 September 2026.
General operational education using public United States filings. Figures are hypothetical. The custody agreement, market rules and asset type determine actual services, protections and liability.
General business information. Obtain advice appropriate to the legal, tax, accounting and financing facts. No offer, lender commitment or transaction outcome is represented. All worked examples use expressly assumed figures. Editorial draft date: 17 September 2026.
