BOC Institutional Wealth & Custody – Asset Protection and ease of access among the priorities of institutional clients

Interview with Marios S. Georgiades – Manager Institutional Wealth & Custody at Bank of Cyprus

What are the needs of institutional clients today?

Institutional clients need their investments to be properly managed, in line with their investment profile and goals, as well as be adequately protected and easily accessible.

Bank of Cyprus, through the Institutional Wealth & Custody Unit, offers an array of financial services that are flexible and adaptable to the needs of every institutional investor.

Institutional clients can easily manage and have control over their investments by using our custodian and order-execution services, and are able to add new portfolios, as needed, with third-party managers and /or investment advisors.

In addition, we offer Discretionary Asset Management or Advisory Services through CISCO Asset Management. CISCO is a wholly owned subsidiary of the Bank of Cyprus.

What basic services does the Institutional Wealth & Custody unit offer?

The Institutional Wealth & Custody Unit forms part of the Bank of Cyprus Wealth Management services and offers specialised financial services to institutional clients.

The Unit offers a wide range of services aiming to meet clients' complex needs, such as custodian services/safekeeping of securities/ order execution, settlement and clearing of transactions, processing of corporate actions, and foreign exchange services.

The Unit is also active in the Cyprus Investment Fund Sector, offering Depositary services for funds. The Depositary service includes the safekeeping and verification of assets according to the investment strategy and limits of any given Fund, cash flow monitoring, and other oversight functions as required by applicable laws, regulations, and the Fund's offering documents.

What should we know about the safekeeping of assets held in custody?

The key for the safekeeping of securities for any custodian bank is to ensure that the clients' investments are safe, protected and easily accessible.

This is why we work with the largest and most reliable custodians, with access to a vast network of associates, who are in a position to properly support the securities under custody, while providing timely and accurate information on corporate actions and settlement of transactions.

Moreover, a custodian's experience is particularly important, so is the size and the proper staffing of the custody team. It is essential for a custodian to be able to provide reliable services and respond appropriately and in a timely manner to clients' requirements.

Lastly, the internal governance policies, the ongoing compliance with the regulatory framework validate the custodian's reliability in fulfilling its duties. The custodian must have the capacity to manage any challenges arising in the financial sector.

Talk to us about the safekeeping of securities and custodian services. Are you able to manage a wide range of asset categories?

Custodian services are usually provided by financial institutions such as banks and investment firms. These services include the safekeeping and holding of financial assets on behalf of clients, to ensure the assets are secure and properly managed. The Custodian also facilitates the settlement and clearing of transactions with ease for its clients.

Assets held in custody are usually listed securities in regulated markets such as equities, corporate and government bonds, mutual funds, hedge funds. In addition to securities, we provide custody for physical gold bars and other precious metals.

Through the custodian network that the Bank of Cyprus has access to, we can buy and hold in custody securities in about 60 countries across all developed markets and we have access to more than 200.000 mutual funds in over 50 countries.

Also, we recently acquired access for the custody of securities in the Indian market, following the need identified in the fund industry. The Indian Capital market is a vast market with a capitalisation of approximately €3 trillion, and with a particular mode of operation different to other custody markets that use pool accounts. Hence, we've entered an arrangement with one of the largest and most trusted local custodians - the State Bank of India-Societe Generale, through which, professional investors from Cyprus now have access to India's capital markets for the custody of securities.

What are some of the basic criteria for clients to get access to the options/products you offer? And which clients are you targeting?

Our service offering addresses the needs of institutional clients such as provident and pension funds, financial services organisations, semi-governmental organisations, insurance firms, investment firms, mutual funds, and alternative investment funds.

Our clients mainly consist of professional investors or eligible counterparties. They are demanding clients given the material size of the funds they entrust us with and the fact that the investments most often belong to third parties, such as the members of provident funds or mutual fund investors.

It's common for our clients to have internationally diversified investment portfolios, and they seek out custodian banks with access to global markets via a trusted network of custodian and correspondent banks.

Why should an institutional client trust your services? What comparative advantage do you have that makes you stand out from the competition?

Our comparative advantage primarily stems from our high standards and safeguards. We have a long tenure operating in a highly regulated environment for managing investments in financial instruments and our clients experience a high level of service, protection, and trust.

Furthermore, we are directly accessible and aim to respond swiftly to clients' requests. Custodian services are multifaceted, as they involve diverse capital markets and operating rules, the withholding tax applicable on income from securities, response times to corporate actin deadlines etc. Institutional clients have needs and preferences which we recognize, thus we pay particular attention to delivering value by improving the performance of their investments, with services such as tax relief on local withholding tax on income from investments, when there is scope for such benefit.

How do you respond to questions or concerns from your clients?

We always manage our clients’ concerns - whether about market performance or the security of their investments - through personal relationships, proactive communication, following transparent policies and implementing best custodian practices.

Our team pays particular attention to providing instant support and feedback to our clients' demands, whether regarding their investment orders or on more general issues that they may be concerned about. We stand by our clients, as their trusted partner.

What is your estimate of the value of institutional assets management in Cyprus?

The institutional asset management sector in Cyprus consists of assets managed for investment funds, via collective investment undertakings such as UCITS and AIFs, as well as assets of institutional clients, such as provident and pension funds, insurance companies and other institutional clients, managed by industry professionals.

The value of assets under management is estimated to exceed €15 billion.