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.  The best sub-custodians play a valuable role in helping clients understand what is going on in local markets. They are close to the market. They know the local players, the regulations, tax, accounting and reporting requirements, how the market operates and operational pitfalls. They use their position to influence and encourage the way markets open up and develop best practices. Not only do they provide a first class custody product, they are also good problem-solvers...