Traders and firms looking for custodial services in the U.S. are getting another option.
HSBC Bank USA, N.A. announced the launch of its proprietary U.S. Direct Custody and Clearing offering, extending its global Direct Custody network. This launch and investment in the U.S. further supports HSBCs strategy to be a leading international bank.
The British bank already provides Direct Custody and Clearing services to investors across 89 markets around the world, 39 of which are through its own affiliates. The U.S. Direct Custody and Clearing launch provides a number of benefits to clients, according to the firm, including reduced counterparty and operating risk, a more consistent and seamless service, improved funding transparency and HSBCs balance sheet strength.
Under new regulatory regimes, global custodians are liable for any assets lost in the chain. By creating a proprietary U.S. Direct Custody and Clearing capability, HSBC said it hopes to reduce risk and increase control by internalizing the chain of custody. As a result, clients cash is held on HSBCs balance sheet, while securities are maintained segregated from the Bank’s proprietary assets and at accounts with the DTCC and the Federal Reserve.
