Standard Chartered extends custody and clearing to Bahrain and Oman
Bahrain and Oman are the latest markets to gain access to Standard Chartered's custody and clearing capabilities, as the bank adds three staff in each country to bring its team up to 33 in the Gulf.
The firm previously offered asset-servicing capabilities to investors on the Abu Dhabi Securities Exchange, Dubai Financial Market and Nasdaq Dubai. Standard Chartered has $350 million in assets under custody in the Middle East, and its regional custody and clearing operation is based in the Dubai International Financial Centre.
The bank's clients in Bahrain and Oman now have access to equity and fixed-income securities settlement, safekeeping, corporate actions, income collection, proxy services, foreign-ownership monitoring and disclosure services, cash management, foreign exchange, reporting and information services.
"Our custody launch in the Middle East confirms our focus on providing sophisticated securities services across Asia and the Middle East," says Giles Elliott, global product head of securities services. "[We] look forward to playing a key role in partnering with the markets to help drive the development of capital markets in the Middle East and developing new standards in custody services."
The Middle East, despite its recent credit troubles, is still perceived as a growth market by many service providers. Last year, Citi added custody and clearing services in the United Arab Emirates and in 2008 there was a flurry of expansion -- from Standard Chartered's expansion of services to the Abu Dhabi Securities Exchange to HSBC adding to its fund-services team with the appointment of Jayant Rikhye.
But rapid roll-out of securities services in the Gulf remains a challenge for foreign providers because of local restrictions. Bahrain only implemented a regulatory structure to permit custodians to operate in the market last year. Saudi Arabia, the Gulf Cooperation Council's largest economy, remains largely off-limits to foreign investors, with foreigners only allowed indirect shareholdings through swap agreements on its national stock exchange, the Tadawul.
Securities services increase investor and broker-dealer market access, which helps develop local capital markets, says Standard Chartered.
A spokesman says the bank is "aggressively" expanding in the region, but would not discuss a time line for offering custody and clearing services in other markets. The firm currently offers securities services in 21 markets throughout Asia and the Middle East.