Custody services

Any activity associated with safekeeping and custody of securities as well as with registration and transfer of the rights on securities is considered to be Custody activity.

Within the scope of Custody activity the Bank provides to its customers the following services:

  • Registration of the rights and obligations arising from the customer’s holding of securities.
  • Acting as a nominee holder of the customer’s securities.
  • Opening and maintaining of a segregated custody account for the customer.
  • Delivering the complete information concerning his/her securities to the customer received from the issuer, Central Depositary.
  • Other services permitted by the legislation and related to the Custody activity.

On 16 April 2013 HSBC Bank Armenia cjsc was granted the status of “Regulating Market System Member” by Central Depository of Armenia.

Important note

The risk of investments on behalf and name of the Customer are fully carried by the Customer. The Bank is not responsible for covering the losses of the Customer if the losses are not resulting from the Bank’s inappropriate behaviour.

Rules on Custody Services in Securities Market (PDF, 653KB)

The tariffs on custody services are presented below, as well as in the Investment Services_ Information booklet for legal entities.

Tariffs

Tariffs on Armenia Securities Custody Services – calculated on face value of securities

RA Government bonds
(Armenian Dram denominated)
Tariffs
Securities account opening AMD 10 000
Securities account service fee* 0.2% annually (with quarterly payment) minimum AMD 10,000 quarterly, calculated on portfolio daily average value
Securities transfer
Within the same Custodian AMD 2 000 (per security)
Between other Custodians AMD 10 000 (per security)
Provision of statements/ advices As per Bank tariffs

 

*Securities account service fee is not charged if the account is held with zero balance and no transaction is conducted during the quarter.

Investment services tariffs _ Information booklet for legal entities (PDF, 193KB).

General Terms

Service provision address

The custody services are being provided only by the authorized staff of Global Markets Department who provides Investment services within and on behalf of the Bank, accepts, transfers and processes Customer instructions. Global Markets Department location is Head office, 0009, Teryan 66 Street, Yerevan, RA. Also custody services related instructions can be presented by customers both in hard copy and via electronic communication means agreed with the Bank and set out in the Rules on Brokerage and Custody Services in the Securities Market.

Payment Conditions

The Customer undertakes to pay to the Custodian commission fees for the Custodial services hereunder in accordance with the Tariff of Charges effective at the moment of provision of Custodial Services approved and published by the Bank.

The commission fees charged by the Custodian are fixed based on the nature and volume of Custodial services provided in favour the Customer.

The Custodian charges the commission fees from the Customer’s AMD account with the Custodian. Where no sufficient funds are available on the AMD account of the Customer, the Custodian shall be entitled to debit the foreign currency account of the Customer with the amount to be charged, convert the foreign currency into AMD at the purchase rate of the Custodian for the respective day and only after that charge the respective amount.

The Custodian shall have a right to change unilaterally the Tariff Charges with at least 14 (fourteen) calendar day notice to the Customer prior to applying the amended Tariffs.

The Notice to the Customer shall be made by making a respective announcement in the web-site of the Custodian and/or by placing a respective announcement thereon in the branches of the Custodian.

The rules and timeframes for contacting the customers when accepting the instructions

When receiving investment orders and instructions from the customer, the timing and customer contacting terms are regulated by the Bank’s Brokerage and Custody Services Provision Rules.

The Instruction may be presented both in hard copy and electronically. The instruction is considered presented if it is submitted by the Customer or the authorized Person in hard copy, or is sent electronically initially agreed and specified in the Agreement.

The Customer Instruction is considered to be presented at the moment it is accepted by the Bank. The hard copy Instruction is considered to be accepted by the Bank when the Bank Responsible staff returns to the Customer the signed Instruction. The electronically presented Instruction is considered to be accepted by the Bank, at the moment the Bank sends the Customer a confirmation message stating the receipt of the Instruction.

The Instruction will be processed on the same business day if it is accepted by 14:00. If the implementation of the Instruction assumes transfer/deposit of resources (securities and monetary funds) to the technical account of Stock Exchange or CDA, then the Instruction is processed during the next business day.

The instruction, accepted by the Bank after 14:00, will be processed during the next working day.

The transaction report is delivered to the Customer on the next business day of the transaction date making a relevant note in the Customer information card. If there is no instruction on the means of delivering reports in the Customer information card, the Custodian should deliver the reports only to the Customer or the authorized person.

Contract Period

Custody Agreement shall enter into force from the moment of its signing and shall be effective for indefinite period except for 7.10 point of Custody Rules as described below: The Agreement shall be considered as terminated if the Customer has not performed any transaction by his/her Security account within uninterrupted twenty-four months and if these accounts are held with zero balance.

Conditions on providing and termination of securities service provision

The servicing and termination of servicing of securities by the Custodian is made by including and excluding the Securities form the list of Securities serviced by the Custodian.

The Securities list serviced by the Custodian is provided to the Customer upon the request.

The Custodian may terminate the servicing of the securities if the securities are matured or declared void, in case of liquidation of the issuer as well as when there are amendments in the terms of circulation of securities that confine the servicing of the securities by the Custodian.

The Custodian has no right to terminate the servicing of the securities if they are registered on the Customers Securities Account.

The Custodian is obliged to advise the Customer about the termination of Custody service or its license, as well as in cases of termination of the custodial agreement or liquidation within a week. In the case the Customer is obliged to provide all necessary information within 30 days necessary the Custodian to transfer and re-register Customer Securities with another custodian (including foreign custodian).

The Custodian transfers the Customer securities to another custodian for re-registration within 3 business days after receiving the Customer Instruction. The transfer of the Customer securities is executed as described in the chapter 8 of the Rules.

In cases the Custodian does not receive instructions from the customer, the securities are registered in the name of the Customer in the registry of the owners of inscribed securities, as determined by the agreement between the custodian and Registry holder (Central Depositary or issuer).

The custodian compensates caused damage to the customer as a result of not carrying out its responsibilities or carrying out them improperly, if it is not proved that the damage is a result of force major event or through the customer’s fault.

The Custodian is obliged to ensure the maintenance of the information about the registered Securities on the Customer Securities account and the transactions exacted by them, which are excluded from the list of servicing securities.

Conflicts of Interests

Provision of Statements and Reports

For every transaction on Securities Account a report evidencing the processing or rejection of the transaction is delivered to Customer.

The transaction report is delivered to the Customer on the next business day of the transaction date making a relevant note in the Customer information card. If there is no instruction on the means of delivering reports in the Customer information card, the Custodian should deliver the reports only to the Customer or the authorized person.

To ensure the flexibility of information exchange, several methods of statement delivery may be selected by Customer or the authorized person (e.g. the use of electronic communications on condition that the original copy of the report or the statement to be delivered by post service or at the head office of the Custodian). The reports on activities with nominee accounts opened by foreign custodians with the Custodian as well as other documentation can be delivered via mutually agreed international interbank settlement systems (particularly via SWIFT or other systems).

If the Customer or the authorized person does not present any objection on executed transactions within 5 business days after the receipt of the report, the transaction details and the balance on the Securities Account are considered as confirmed.

The Custodian is obliged to provide the Customer statements on Securities Accounts transactions and balances on pre-arranged periodicity (monthly, quarterly or maximum on annual bases). The statements shall contain the information and data stipulated in RA legal acts.

The risks associated with transactions in the securities markets

The Bank provides Custody services according to the Rules for the Government securities issued by Republic of Armenia in the local currency that are freely circulating within the territory of Armenia.

The risks associated with transactions in the securities markets. The Bank informs the Customer that each investment in securities bears a risk. While making transactions in the securities market the Investors are exposed to the following risks:

  • Market risk, which is the risk of changes in the prices of financial instruments. The market prices of the securities and their variations are out of the Bank’s control, due to which the Customer can lose in the value of the portfolio or even the whole portfolio if the former chooses to make investments in securities.
  • Liquidity Risk, which is associated with the risk of declining interest of other market participants to the given instrument. The liquidity of the given financial instrument depends on general market conditions, internal rules of Stock Exchanges and Trading Platforms, which can have a negative effect on the given financial instrument and correspondingly on the Customer portfolio.
  • Legislation changes risk. It is associated with actions taken by governmental organizations and other organizations regulating the markets due to which the Customer can incur losses.
  • Infrastructural risk. The risk is associated with workflow interruptions of depositories, stock exchanges, clearing organizations due to which the Customer can incur not refundable losses of assets (funds as well as securities).
  • Risks associated with electronic transfer of information. The Customers are being informed that investment activity bears risks associated with electronic nature of transfers such as, absence of reliable connectivity, possibility of problems with electricity or software, etc. The Bank bears no responsibility on the interruptions of electronic trade systems incurred by actions of third parties. The Bank also bears no responsibility if due to the actions of third parties the information transferred between the Bank and the Customer becomes accessible to third parties.
  • Other risks. Investment activity is not limited to the risks mentioned above. The investment service may be also associated with other risks.

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+37460 655 000

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Last updated on: 22/11/19 18:47 UTC

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