In the past, when securities still consisted of real paper documents, buyers received a physical certificate for their shares or bonds. The paper document had to be transferred from the seller to the buyer and sometimes reassigned in writing (endorsed). The bank usually held the securities for its customers in a physical securities custody account. As you can imagine, this procedure was very time-consuming and expensive. Today, securities trading is much easier. The physical certificate is stored centrally and customers receive only an electronic version when they trade securities. They no longer have to deal with physical securities if they decide to invest their money.
What is a securities custody account?
Securities are kept in a securities custody account.
Your account for securities trading
This means there now has to be a way of storing securities electronically. This is where the “custody account” comes into play. The securities custody account is the digital repository where electronic securities or fund units are kept. It is always linked to your account, to ensure that you can conduct transactions, such as the sale or purchase of shares, bonds or fund units. You can also have credit, such as distributions, interest or dividend payments, paid into it. If you wish to invest money and trade on the stock exchange, you first require a custody account. This can be opened in the same way as a bank account – for example, directly with your customer advisor or quite simply online.
Manage custody account via online platform
Your custody account is accessed in exactly the same way as your bank account. You have secure and easy access to it at all times via online banking. This allows you to purchase or sell securities or keep track of the latest prices conveniently and inexpensively at home or via tablet or smartphone. The custody account enables you to check on your investments at any time. It also allows you to issue instructions to your customer advisor or to your bank by telephone whenever you wish.