Custodians: Where does the buck stop?

Custodians have always been serious about post-investment risks in local markets, but they need to use their knowledge and influence wisely.

This article appears courtesy of Global Investor

The 2009 AIG Global Funds Prospectus is worrying reading for investors who know little about post-investment risks in foreign markets. It lists no fewer than 32 principal risk factors. Not surprisingly, AIG take their responsibilities very seriously. The 2002 Prospectus listed 12 factors. The list is also worrying for the sub-custody community, for opposite reasons. Sub-custodians almost know too much about these risks, and as this article argues, it’s a mixed blessing, requiring well thought-out strategies.