Global Investor Services (GIS), a division of HSBC Bank PLC and part of HSBC Securities Services (HSS), has been upgraded to “AA” overall rating (with a stable outlook) for public global custody by Thomas Murray, a specialist custody rating, risk management and research firm.
Thomas Murray said GIS demonstrated a very strong global custody offering and that the upgrade was due to improvements made over the past year.
Those improvements include initiating the creation of a global business line for custody services across the HSBC Group and developing a common internet portal for information delivery to clients, Thomas Murray said.
Moreover, there is now significantly better client protection against asset servicing risks; expansion in the number of markets (to 58) in which contractual settlement is offered; enlargement to 66 contractual income markets, with 44 at pay date; and query turnaround times tightened to 24 hours, the custody ratings company added.
There have also been improvements in corporate action information delivery and the monitoring of the sub-custodian network, they said.
“Thomas Murray is delighted to be able to announce the public global custody rating of HSBC,” said Simon Thomas, CEO and Chief Ratings Officer of Thomas Murray. “This rating challenges other major global custodians to objectively demonstrate that they are able to offer an equivalent level of risk minimization to their institutional investors, coupled with a very strong level of service.”
The global custody rating is a business rating that assesses the operational performance of global custodians – financial institutions that hold securities in safekeeping on behalf of institutional and banking clients.
The methodology used by Thomas Murray in assessing a particular rating considers the business credentials and service capabilities of global custodians, as well as the quality and effectiveness of their operational infrastructure, the company said. It also assesses the global custodian’s willingness and ability to protect their clients from losses and incorporates a risk analysis of the custodian, it said.
Thomas Murray’s ratings are assessed on a consistent global scale, using the familiar AAA to C ratings methodology. Once the rating is assigned there is an ongoing surveillance process to monitor the custodian, the company said.