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Resources for bankers

Custody Services & Securities Lending

Custody services provided by a bank typically include the settlement, safekeeping, and reporting of customers' marketable securities and cash. Securities lending can allow a customer to make additional income on custody assets by loaning securities to approved borrowers on a short-term basis.

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Custody Services (Comptroller’s Handbook, January 2002)
Addresses the fundamentals of securities custody and related services and provides examiner guidance for those activities

BC=Banking Circular
IL=Interpretive Letter

Custody Trust Ledger Deposit Account Program (IL 1078, April 2007)
Addresses entering a custody trust ledger deposit account program with cash deposited from a broker-dealer in a bank’s trust department

Free Riding in Custody Accounts (BC 275, September 1993)
Outlines the loss and enforcement risk banks face should customers buy and sell securities without sufficient funds in their custody accounts

Investment Portfolio Credit Risks: Safekeeping Arrangements (OCC 2002-39, September 2002)
Alerts banks to the credit risk in safekeeping investment portfolio assets with third parties, such as brokers, broker-dealer firms, and other banks

Risk-Based Capital Treatment for Certain Securities Lending Transactions  (IL 1066, November 2005)
Addresses a request for an alternate approach to calculate risk-based capital requirements for a securities lending transaction

Securities Conduit Lending Services (IL 1026, April 2005)
Addresses a request for confirmation that securities conduit lending services are legally permissible for a national bank

Securities Lending FFIEC Statement (BC 196, May 1985)
Covers national banks lending securities from their investment or trading accounts or from customers’ safekeeping, trust, or pension accounts

Related News and Issuances
Publish DateIdentifierTitle
03/18/2015  NR 2015-37, Comptroller of the Currency Issues Statement Regarding Bank Investment in the Municipal Securities Market