Risk Terms

Custody Risk

Definition

What is Custody Risk?

The risk that assets are lost, frozen, misrecorded, or inaccessible through a custodian or safekeeping arrangement.

Example in practice

Poor recordkeeping causes uncertainty about ownership of securities.

Keep learning

The possibility of loss because broad market prices or rates move against an investment.

The possibility that a borrower or issuer will fail to make promised payments or suffer a downgrade.

The possibility that changing market interest rates will reduce an investment's value or income appeal.

A day on which relevant financial institutions and markets are open for normal processing.

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