The Global Investor/ISF sub-custody survey has been extended until Friday December 20.

Click on the following link to take part in the survey: <http://goo.gl/8pQIHU>

The survey will invite users of the services of sub-custodians, from broker-dealers to global custodians, to rate their performance.
 
The results of last year's survey can be viewed here.


SURVEY METHODOLOGY

All users of the services of sub-custodians (agent banks), from broker-dealers to global custodians, are asked to rate their performance.

Respondents are asked to rate sub-custodians in all countries in which they operate. The performance of sub-custodians is rated separately in each country. The global survey’s results are presented in four regions: Europe; the Americas; Asia Pacific; and Africa &
the Middle East.

Respondents are asked to rate their sub-custodians across 12 service categories (see list below). Respondents are permitted to rate up to 10 sub-custodians in each country. For each country there will be two tables: unweighted and weighted.

For the first time,
the weighted table allows for assets under custody as well as how important the respondents consider a certain category to be (these factors were dealt with separately in 2013).

Unweighted table
For each country, all valid responses for each sub-custodian are averaged to calculate an unweighted score. There will also be regional and global tables that combine the relevant ratings.

Weighted tables

Step one: weighting by assets under custody.

Weighted versions of all unweighted tables are produced.

First, an allowance is made so that a greater weight is given to the views of larger respondents, defined by their assets under custody (AuC).

Respondents are asked to choose a band that reflects the size of their AuC in billions of US dollars. The boundaries of each band are determined by the AuC of respondents to last year’s survey. They are chosen so an approximately equal amount of beneficial
owners fit into each band.

A weighting is attached to each band as follows:

<$100bn 0.6
$100bn – $200bn 0.8
$200bn – $500bn 1
$500bn – $1000bn 1.2
>$1000bn 1.4

Each respondent’s unweighted rating of a sub-custodian is then multiplied by the appropriate weighting. For example, if a global custodian with assets under custody of $567bn gives a sub-custodian an average score of 6.7, its contribution to the weighted
score is 6.7 x 1.2 = 8.04. This weighted rating is then averaged with all other respondents’ weighted ratings.

Where a figure for assets under custody is not disclosed a default weighting of 1 is assigned.

Step two: weighting by category importance
Respondents are asked to rank the importance of each of the service categories. These respondent rankings are then averaged. These average ranks are then used to create a weighting for each service category, which theoretically could range between zero and
two but will depend on the actual responses. The average weighting is one to preserve comparability with unweighted scores.

For clarity, if on average respondents consider ‘relationship management’ to be the most important category, it will be given the greatest weighting when calculating scores in the weighted by importance tables.

Qualification
Qualification is on a country-by-country (rather than regional) basis. To qualify in each country, a sub-custodian needs to receive a minimum of three responses.

If a sub-custodian is rated multiple times by the same respondent firm in the same country the ratings will be averaged and will only count as a single response for the purposes of qualification.

To qualify for a regional table, a sub-custodian must qualify several countries, depending on the amount of markets in that continent. A sub-custodian must qualify in at least the following number of countries in these continents: Asia Pacific, 10 (of 18); the Americas, 4 (of 7); Europe, 18 (of 32); and Africa and the Middle East (8 of 15).

To qualify globally, a firm must qualify in at least two regions.

CATEGORIES
Sub-custodians are rated across 12 main categories, of which some are divided up into sub-categories. The 12 main categories have equal weight. Where a main category is split into sub-categories, an average of the sub-categories is taken to produce the score
for the main category.

Seven main categories are mandatory (as all sub-custodians offer these services) and the remaining five are optional (as some do not offer all or some of these).

The categories are as follows:

Mandatory categories
1. Settlement
    o Efficiency of pre-settlement matching and reporting
    o Failed trade management
    o Timeliness, accuracy and completeness of reporting
    o Competitiveness of cut off times

2. Safekeeping

3. Dividend/interest collection

4. Corporate actions
    o Timeliness, accuracy and completeness of notifications
    o Timeliness, accuracy and completeness of confirmations
    o Competitiveness of response cut off times

5. Client service
    o Quality of subject matter expertise
    o Responsiveness and effectiveness of enquiry management
    o Availability and calling frequency

6. Reporting capability
    o Flexibility of delivery channels
    o Quality and timeliness and of SWIFT and other reporting

7. Tax reclaim services
    o Solicitation of timely tax documentation
    o Quality of reporting

Optional categories
8. Market information
    o Relevance of marketing information
    o Timeliness of market information

9. Relationship management
    o Understanding of your business needs
    o Ability to set up new products when requested
    o Quality of subject matter expertise
    o Responsiveness and effectiveness of enquiry management

10. Securities lending fail coverage

11. Regulatory expertise and capability

12. Product development and innovation