The essential role of depositary banks
Despite being considered the least visible face of the asset management industry, depositary banks are essential to the smooth functioning of the sector. These entities ensure the security and integrity of financial assets, building trust in investment funds and protecting their investors.
Cecilia Rufino, Country Manager of Cecabank's Lisbon Branch, provides her insights, highlighting that in Portugal: "There are growth opportunities for an independent benchmark depositary which, as is the case in Spain, can provide services to any type of fund manager", noting the essential role of depositary banks.
The main function of depositary banks, which ensure investors' interests are protected, is to safeguard the underlying assets, making sure they are kept separate and apart from the assets of the management entity. In Portugal, the four largest national depositary entities of securities funds exceeded, according to Morningstar data from February 2024, 16 billion euros in custody assets on national transferable funds.
Currently, depositary banks are facing several common challenges: regulation, technology and digital assets.
