Safety of deposits and securities · Question 3 of 12
What happens to the shares in a securities account if the custodian bank becomes insolvent?
1 answer is correct. Easy
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Answer
- C They remain the customer's property and are transferred or handed over
Explanation
Securities in the account are the customers' property; the bank merely holds them in custody. In an insolvency they are not counted as part of the estate, and the customer can have them handed over or transferred to another account. The balance on the settlement account, by contrast, is a deposit.