How markets work
Custodian
The institution that physically safeguards the securities you own.
How it works
Custody is separate from broking. The broker executes; the custodian holds. Large brokers often own their custodian, but the legal separation is what protects client assets if the broker fails.
Client assets are supposed to be held separately from the firm’s own, so that creditors of a failed broker cannot reach them. How well that works in practice depends on the jurisdiction and the quality of the firm’s records.
Related terms
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All 33 How markets work terms · The full glossary, 433 terms
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.