depotbank

A depotbank, or custodian bank, is a financial institution that holds and administers securities and other financial assets on behalf of clients. In German-speaking markets the term specifically denotes the bank responsible for safekeeping, administration, and servicing of a client’s securities held in a depot (securities account). The depotbank acts as the creditor of record for the client’s assets and as the counterparty to settlement operations in the securities market.

Key functions of a depotbank include safekeeping of securities in book-entry form or physical form, settlement of trades through securities settlement systems, and maintenance of client securities accounts. Asset servicing duties cover processing corporate actions (such as dividends, interest, share issues, and mergers), distributing income, tax reporting, and proxy voting. Depotbanks may also provide additional services such as lending of securities, collateral management, and detailed reporting to clients.

Clients typically include private individuals, asset managers, pension funds, insurance companies, and corporations. Depotbanks often participate in national and international settlement networks and may operate with access to large multi-jurisdictional platforms (for example through connections to international custodian networks) to support cross-border custody and settlement.

Regulation and market role: Custodian banks are regulated financial institutions overseen by national authorities and must comply with laws governing safekeeping, client asset segregation, and anti-money laundering. In many markets they operate independently of trading desks to reduce conflicts of interest and charge separate custody and asset-servicing fees. The term depotbank is commonly used in Germany; internationally the equivalent term is custodian bank.