In a sign that the tedious job of settling and reconciling trades in India is getting easier, the custody arm of the RBC Financial Group has chosen Standard Chartered as the sole sub-custodian for its Indian assets. The renewed contract sees the departure of Deutsche Bank which was also acting on behalf of the Canadian group in the country.

A subsidiary of the RBC Financial Group (Royal Bank of Canada), RBC Global Services was formerly known as Royal Trust Corporation of Canada and is number 11 on the list of the world's largest global custodians. RBC has been working with Standard Chartered in India for seven years and also uses its sub-custody and local clearing services in Hong Kong, Korea, Sri Lanka and Bangladesh.

Commenting on the appointment, Paul Hedges, Standard Chartered's head of custody sales, said the choice of one sub-custodian rather than several is a reflection of the reforms taking place in India's back office. "When global custodians first entered the market to work with their foreign institutional investor clients they needed more than one sub-custodian relationship because of the volume of paperwork required to settle and reconcile trades," he says. "With market reforms this process is now a lot smoother."

Anand Natarajan, head of custody and clearing services in India for Standard Chartered, says with 23 exchanges and two depositories, India has always been a challenging market for custodians. "All processing, settlement and reporting systems need to be modified to recognize multiple depositories and settlement procedures," he comments. "The amount of customization work that needs to be done for each client is extensive."

"Being in constant contact with the regulators is important," adds Hedges. "We help our clients to interpret regulatory changes that will impact the investments that their fund managers make in the country."

Standard Chartered's presence in India has been fortified in recent years with the 2000 acquisition of ANZ Grindlays which made it the largest foreign bank in the country. The sub-custody team has been swift to build on relationships obtained through the purchase.