Define: Depositary

A depositary is a person or entity that holds and safeguards assets or funds on behalf of another party.

A depositary can hold various types of assets, including cash, securities, real estate, or other valuable items.

The role of a depositary is to ensure the safekeeping and proper management of assets during a financial transaction, such as a merger, acquisition, or investment fund.

While both depositaries and custodians hold and safeguard assets, a depositary typically has a broader range of responsibilities and may also provide additional services, such as administration and oversight.

Yes, a depositary can be held liable for any loss or damage to the assets it holds if it fails to fulfill its duties and obligations as outlined in the agreement or contract.

In general, a depositary is not responsible for fraudulent activities conducted by the asset owner. However, if the depositary had knowledge or involvement in the fraudulent activities, it may be held liable.

The qualifications and requirements to become a depositary may vary depending on the jurisdiction and the specific industry. Generally, a depositary should have the necessary licenses, expertise, and financial stability to fulfill its duties.

Yes, a depositary can terminate its agreement with an asset owner under certain circumstances, such as non-compliance with the terms of the agreement or if the depositary believes that continuing the relationship poses a risk to its reputation or legal obligations.

Yes, an asset owner typically has the right to switch depositaries if they are dissatisfied with the services provided or if they find a more suitable depositary that meets their needs.

Yes, the activities of depositaries are often regulated by financial regulatory authorities or specific laws and regulations in each jurisdiction. These regulations aim to ensure the protection of assets and the integrity of financial transactions.