Nominee company: Difference between revisions

A wholly-owned subsidiary of a [[custodian]] used as a nominee company to hold legal title to client investments (other than cash). This common structure in the UK custody Market was in fact  endorsed by Peter Bloxham's ''[https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/271040/PU1560_SAR.pdf Final review of the Investment Bank Special Administration Regulations 2011]'' in January 2014, the third recommendation of which was:

:"... the rapid transfer of client positions to a solvent successor firm was facilitated by the fact that the failed firm held substantially all its (UK) {{cassprov|custody asset}}s in the name of a separate {{cassprov|nominee company}} {{tag|subsidiary}}. It was possible to transfer the shares in that {{cassprov|nominee company}} as part of the transfer of client positions. The transfer of the shares in the {{cassprov|nominee company}} was sufficient to produce the result that all the client holdings registered in that nominee passed into the control of the transferee, without the need for transfers of individual holdings. I recommend that consideration be given by the FCA to encouraging this practice."

Yes, the {{tag|CASS}} rules really say "with respect of". And they don't say the same level responsibility ''as what''. So nice bit of drafting there, ladies and gentlemen of the European Union.

And if you were wondering what a "nominee company" is:

====Discussion====

Note a nominee is not a custodian per se. It is a dedicated entity which does nothing other than acting as a registered owned of shares.