Highlights 1997Global Custody Yearbook

||8-8-97|| ADR Update from Russia
||4-11-97|| Oh? Where are Custody Fees Headed?
||4-4-97||Survey results on Straight-Through-Processing (STP), S.W.I.F.T, I.S.I.T.C., and DTC developments.
||2-3-97|| Northern Trust on Taiwan
||12-30-96|| Royal Trust on improved access to foreign capital in the Republic of Korea.
||12-30-96|| The WWW and Global Custody ...One Year Later
||12-9-96|| Russia ...and registrars in Siberia!
||12-6-96||State Street Bank and Trust on securities market practices in Kazakhstan.
||12-2-96||India securities infrastructure is a big problem for investors!
||11-19-96||Romania is the most popular addition to global custody networks.
||Brown Brothers Harriman & Co.Network Specialists highlight risks associated with investments in sub-Saharan markets.

All existing copyrights apply. Edited for the Internet WWW.
Survey data collected 4th quarter of 1996, unless otherwise noted.

The contributing custodians to the 1996 survey are ABN AMRO Bank N.V., The Bank of New York, Bank One Trust Company, N.A., Bankers Trust Co., Banque Paribas, Brown Brother Harriman & Company, Chase Manhattan Bank N.A., Investors Bank and Trust Co., Lloyds Bank Securities Services, Midland Securities Services, Morgan Stanley Global Custody, The Northern Trust Company, Royal Bank of Scotland, Royal Trust, and State Street Bank and Trust.

Several custodians from prior year's survey were unable to participate this year, namely: The Bank of Bermuda, Barclays Bank PLC, Boston Safe Deposit & Trust, Citibank, N.A. and Fiduciary Trust Company International. Industry consolidations eliminated two additional participants from prior year's - Chemical Bank Geoserve, U.K. and J.P. Morgan.

This special report on global custody - the Fourth Annual Global Custody Survey - was prepared by Buttonwood International Group, New York. The data collection efforts for the 1996 Survey are almost complete (November 1, 1996); survey results appearing shortly thereafter on our Web site. The 1997 Global Custody Yearbook - as last year - is available on the Internet World Wide Web at www.buttonwood.com.  The 1997 Global Custody Yearbook includes all survey results, in-depth Service Profiles, and contributed articles; hardcopy version is scheduled for an early January printing.

Buttonwood's global custody survey continues to be improved in a number of ways:

• The number of participating global custodians is sixteen, a net increase of one over last year. We welcome first-time survey contributors - ABN-AMRO Bank N.V., Bank One Trust Company, N.A., Banque Paribas, and Brown Brother Harriman & Co.
• Global custodians were asked to comment about several industry trends

  ... the impact of recent industry consolidations

  ... the separation of asset management and custody

  ... the current and future direction of custodian fees.
  Responses were candid - providing a number of interesting insights about the industry.

• The survey explored the use of the Internet WWW for the global securities business. [Ed. Note - This year, the survey questionnaire was distributed and responses received via the Internet! Overall, using Internet in this manner was a highly successful endeavor with only a few minor glitches.]
• A number of global custodians submitted current, in-depth papers about the challenges of doing business in the Emerging Markets. Articles will be published at this Web site and also, included in the 1997 Yearbook.

Survey Universe

Assets held in custody reached new heights - this years total was close to $14 trillion in worldwide assets. Second-tier markets represent $233 billion in assets.

Network Management

A review of network management trends reveals an aggressive expansion into emerging market countries. Of particular note, Romania is receiving considerable attention by global custodians as the most popular addition to their sub-custodian networks.

Country Hot Spots

India and Russia are the most difficult countries in the world to provide global custody services to institutional investors, the survey shows. Securities infrastructure is a big problem! The survey identified a number of additional countries with significant operational problems affecting both investor and custodian. Countries in this category - Chile, Colombia, Hungary, Indonesia, Israel, Pakistan, Poland, Taiwan, Thailand, Turkey and Venezuela - are available to Yearbook subscribers at Other Hot Spots.


International Securities Lending

||rev. 2-3-97|| Eight global custodians reported International Securities Lending on a country-by-country basis for a total of $72 billion, with equities at $41 billion and fixed income at $31 billion. Ten global custodians reported BP Spreads for Securities Lending on a country-by-country basis.

Survey results are available at International Securities Lending.

© Copyright 1999 - 2004 Buttonwood International, All Rights Reserved.
14 Wall Street, 20th Floor
New York, N.Y. 10005 U.S.A.