The depositary is what and how does it work?

The depositary is a banking unit that acts as a depository for securities. Also sometimes under the depositary are the cells in the bank, in which gold, money, jewelry and other valuables are stored. But in this article we will talk about the first definition, that is, about a participant in the securities market.

The depositary is what for?

The depository banking unit is responsible for the recording and storage of such securities as, for example, shares. It also helps to control the transfer of ownership from one owner to another. That is, if brokers and dealers are engaged in the transactions themselves, the depository's unit fixes that the transaction took place and the ownership of these securities passed to the new owner.

How it works?

In order to become a depositor, that is, the owner of a depo account, you need to conclude a depository agreement with the financial institution. A securities account is all records in the aggregate relating to shares, bonds and other securities of a particular depositor. They can act as a private individual, and legal. In this account, absolutely all transactions that have ever been committed with securities are displayed.

When a person acquires shares, a separate account is created in the depository in his name, all his securities will be registered in it. So they will be under account and protection. Thus, the depositary is a repository of such records, where all securities belonging to a person or legal entity are held. They can be both in physical (paper) form, and in electronic.

What can the securities depository do?

The most basic operations that can be performed by a client who opened a depo account, except for the storage and accounting of certificates, concern their purchase and sale and donation.

In addition, the client has the ability to transfer securities to other depositories or registries, as well as on request to receive reports on their savings and dividends. Securities can be left as collateral for loans. Then the depositary can both impose and remove encumbrances on paper.

The depositary is also the assistant who credits the owner of the securities with his income for them, that is, dividends. He is also responsible for the security of entrusted securities, helps to protect against theft and from scammers.

Services provided by the depositary

They are divided into basic and accompanying. The first include the storage of certificates themselves, financial calculations, provision of information on joint-stock companies, re-registration of property rights, preparation of reports and other documents.

The accompanying services are as follows: research and analysis of the market, asset lending, reporting on investment activities, etc.

Types of depositories

In the Russian Federation, about half a million organizations have the right, under license, to be professional participants in the securities market, which is growing more and more actively and actively. Based on the total value of securities held in the custody, the ratings of the largest and most reliable are compiled annually. The highest degree of reliability is marked by three letters "AAA".

In addition, the depositories are divided into different types according to their purpose.

The Settlement Depository handles settlements for transactions in the securities market.

Custody provides services only directly to the holders of assets. It is already divided into a specialized depository and a non-specialized one. The first is involved in the accounting and control of mutual funds, as well as private pension funds of various companies. The second, in addition to performing its standard and basic functions, can be an intermediary in the management of the securities entrusted to this depositary.

There is a central depository. He controls the entire securities market in the country or in any particular region, and performs all financial calculations. Such depositories are both abroad and in Russia. According to various criteria, this status is assigned only to a single legal entity in the country or region. In Russia, the central depository appeared recently in comparison with the West and is located in Moscow. Since 2012, it is CJSC "National Settlement Depository". He is engaged in conducting transactions on depo accounts of securities holders when these participants sell transactions through various organizers of trading on the securities market, that is, when trading on the stock exchange.