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each market level is not so easy. For domestic custodians like us,
it’s easier. We have a diverse set of local clients which each wants
a different set of reports, a different set of formats. We know how
they work and we are able to understand their requirements and
come up with solutions much faster. We know this is something
that is really appreciated by the clients and, as you say, even for-
eigners are now asking for them.
Sachin Samant: Whether I’m servicing a domestic client or
an FPI client, the custody services more less remain the same.
Where things change is the fund accounting reports. Domestic
asset managers are much more demanding in that sense. Typi-
cally, accounting reports require you to know the performance
fee calculations in various different forms: you want to have the
leverage report, you want to have the end investor report, all this
is typically not demanded by the FPI clients.
David Jaegly: From the perspective of a global player, one GC cli-
ent can be active in, say, 82 markets, so he wants some standards
and the standards come from the GC. When you are talking about
local players, even if they are subsidiaries of global mutual funds
operating in India, they have local requirements and you have to
adjust. You have to be able to manage both sides.
Sachin Samant: Global custodians have certain practices and
they try to have the same practices across the network. You can’t
manage over 50 countries if you have very customised products
for each and every country. For example, the Indian IPO market is
probably the only one where you need to submit your application
in the last one hour or two hours. So, there are certain nuances.
David Jaegly: On the custody side I would say it is more or less
manageable. When it comes to fund accounting, although it’s a
more customised service, international providers can bring some
added value from the range of their experience.
Three categories of FPI
Category I
This includes Government and Government-related entities
such as central banks, governmental agencies, sovereign
wealth funds and international or multilateral organisations
or agencies.
Category II
This includes appropriately regulated broad-based funds
such as mutual funds, investment trusts, insurance/ reinsur-
ance companies and appropriately regulated entities such as
banks and asset management companies.
Category III
This category includes all other FPIs not eligible to be
included in the above two Categories such as endowments,
charitable societies, charitable trusts, foundations, corporate
bodies, trusts, individuals and family offices.
Vivek Harlalka: Obviously you need to be cognisant that the cost-
ing and pricing cannot be s et at the global level because we need
to be sensitive to the Indian market, but that’s an advantage that
global players can bring.
Viraj Kulharni: Richard I think you really disturbed a hornet’s nest;
if I may say so, having seen things from both sides (global and do-
mestic), there are good products and services delivered by each!
Not every custodian wants to handle all market segments –
that’s where target size comes into play – beside the standard
and style of service.
The challenge that all the custodians in this room face is
that domestic clients may have more expectations and believe
their custodian should be able to meet them. I had an instance
where a custodian was delivering 800 reports, which I felt was
inefficient and added costs. I was used to about 30 reports for an
individual client.
David Jaegly: Which is already enough!
Viraj Kulharni: Automation was key in that context. Sometimes,
certain reports are an outcome of regulations. In India the
regulator’s continuous focus is in protecting investors’ interests.
I see the market maturing and adopting more global practices,
products and services.
Richard Schwartz: I think this is an excellent moment to say –
‘To be continued,’ because we’ve hit on something we’re not
going to resolve in the last few minutes. Next time we run a
roundtable here, we’ll start where we ended. Thanks very much
everyone.
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Global Custodian
Summer 2018