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Holding by a bank of bonds and money market instruments. For a fee, the bank clips coupons and presents for payment at maturity.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
The act of a brokerage holding a client's securities or other assets on his/her behalf. This reduces the risk of the client losing his/her assets or having them stolen. They are also available to the brokerage to sell at the client's demand. Like a bank, safekeeping provides an investor a place to store assets with little risk. Unlike a bank, brokerages are not allowed to use the items in safekeeping for their own ends. Assets in safekeeping are not fungible for the brokerage because they remain in the client's name; for this reason, brokerages normally require a fee for safekeeping services. See also: Street name safekeeping.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved