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A
s the crucible of the global
custody industry, the US mar-
ket has long been considered
one of the most mature both in terms of
infrastructure and operational capability.
For institutional investors into the US,
sub-custody services have generally been
handled by local divisions of the major
global custodians. This has been reflected
annually in the Global Custodian Agent
Banks in Major Markets survey, where
the same four institutions – BBH, BNY
Mellon, Citi and JP Morgan – have long
dominated the respondent pool.
In the past two years however, a
European global custodian, BNP Pari-
bas, has registered prominently in the
“We used to use a sub-custodian, but you
can’t really be considered a true global player
without a local presence in the US.”
FLORENT THIRY, AMERICAS HEAD OF FINANCIAL INTERMEDIARIES
& CORPORATES. BNP PARIBAS SECURITIES SERVICES
38
Global Custodian
Winter 2018
survey. Given that the US custody market has been well served
by established indigenous providers, why did BNP Paribas feel
there was a commercial opportunity for it to join this group as
an ‘outsider’?
According to Florent Thiry, director and Americas head of
financial intermediaries & corporates, BNP Paribas Securities
Services, the initial trigger was a perceived strategic need to
have a local custody offering based in the US. “As the fifth largest
custodian in the world, it was obvious to us we needed to have
a local presence here. It is, after all, the biggest market in the
world,” he says. “We used to use a sub-custodian, but you can’t
really be considered a true global player without a local presence
in the US. Today, out of the 90-plus markets in our global cus-
tody network, the US is one of the 27 countries in BNP Paribas’
proprietary custodial network which accounts for 90% of client
assets.”
The bank initiated both a global and local custody offering in
the US in 2012, which Claudine Gallagher was sent over to es-
tablish. Since then, it has expanded its related fund administra-
tion business, acquiring the global hedge fund administration
business of Credit Suisse in 2015. “Earlier this year, we closed
on the acquisition of Janus Henderson [US administration
business], which will allow us to offer mutual fund administra-
tion in the US. Our goal is to be a full-service provider here,”
says Thiry.