The worker, not the custodian, may have all records that confirm distribution on a tax-exempt basis. It could also be left to the worker, not the custodian, to determine what income taxes are due on distribution and whether there are tax penalties that could be imposed. The custodian may also not be required to withhold a portion of the distribution that would be used to cover the income taxes owed. If the account holder were to die, the custodian could be responsible for the liquidation of the funds into the account and then impose the distribution of assets to the beneficiaries according to the parameters of the fraudster`s estate. With deposit contracts used for benefit programs, the custodian collects staff funds through regular wage deductions and invests the money; all fees associated with these agreements are generally less than the fees that would be charged to individual investors. The sub-custodian will be a company of the same type as the custodian, but will be authorized by its supervisory authority. It must also meet the minimum solvency and capital requirements of this regulator. Caceis Bank or BNP Paribas are examples of sub-depositors. Custodian companies have a policy of protecting financial instruments. These policies are accessible to all via their websites. They tell you who their sub-depositors are and for what types of assets and regions.
For example, for equities, there will be some deposit banks and others for derivatives. There will also be a distinction between the sub-depository of the European Union and those of third countries. The depositor`s participation in the deposit account balance is not compatible. Hiring sub-custodians is a common practice when it comes to investing in foreign assets. In order not to harm investment funds or their participants, the rules remain the responsibility of the custodian. If a custodian is recruited into an investment fund, it is therefore advisable to check who is the sub-depository. Their insolvency will affect the fund if there are liability exemptions.