Securities safekeeping is the basic service provided by a custodian: holding shares, bonds and other securities on behalf of clients and keeping an accurate record of what each client owns. It once meant storing paper certificates in a vault. Today almost all holdings are book-entry securities, so safekeeping means maintaining electronic positions in a safekeeping account that agree with the records of the central securities depository or registrar.
A custodian bank must keep client assets separate from its own, so that they are not available to its creditors if it fails, and must reconcile its records regularly against the depository. In foreign markets it relies on local agents through sub-custody. Safekeeping is usually sold together with settlement and asset servicing, such as collecting income and handling corporate actions, and is charged as a fee on the value of assets held. The main exposure for clients is custody risk.