HSBC Bank USA, N.A. today announced the launch of its proprietary US Direct Custody and Clearing offering, marking a significant addition to HSBC’s Direct Custody network, which is already one of the most extensive across the globe.
By providing its clients with a proprietary capability in the world’s largest capital market, HSBC will deliver increased levels of asset safety and efficiency for its global institutional investor clients.
HSBC provides Direct Custody and Clearing services to investors across 89 markets around the world, 39 of which are through its own affiliates. The US Direct Custody and Clearing launch provides a number of benefits to clients, including reduced counterparty and operating risk, a more consistent and seamless service, improved funding transparency and HSBC’s balance sheet strength.
This launch and investment in the US further supports HSBC’s strategy to be the leading international bank.
Thierry Roland, CEO Global Banking & Markets – Americas, commented, “The US is currently the largest contributor of outbound revenue to HSBC’s network.
With this launch, we are strengthening our proposition to clients domiciled outside the US. We see a particularly strong opportunity in working with investors from emerging markets, where our network is unrivalled and where appetite for US assets is significant. Not only will this initiative drive growth in US inbound revenue, but it reinforces our position as a global custodian.”
John Van Verre, Global Head of Custody and Treasury, HSBC Securities Services, added: “The launch of our US Direct Custody and Clearing offering allows HSBC to take ownership of the entire value chain to provide a more competitive offering and broaden our relationships with clients in the sovereign wealth, asset management, pension fund and insurance sectors.”
Under new regulatory regimes, global custodians are liable for any assets lost in the chain. By creating a proprietary US Direct Custody and Clearing capability, HSBC reduces risk and increases control by internalising the chain of custody. As a result, clients’ cash is held on HSBC’s balance sheet, while securities are maintained segregated from the Bank's proprietary assets and at accounts with the DTCC and the FED.