Göran Fors: As a custodian, we look at the same aspects, but also at the commitment and long-term relationship with that partner. Having a good partnership is very important.

Per-Ola Jeppsson: I agree that longevity is very important. We want to co-operate with a bank that has not only been in the market for some time, but will stay there. Otherwise, I agree that the safety of our assets is very important. Costs are also a factor, since we are a low-cost company, but I would not say that it’s the priority. First and foremost, I would like to regard the co-operation between an investor and a custodian as a partnership, because we are very dependent on each other. Custody is a crucial element of our daily work and huge amounts of money are flowing through the system on a daily basis. There may not be many transactions, but they are all large amounts.

Agneta Wilhelmson Kåremar: At AP4, we have to do procurement and Swedish law states that we have to look at the price very carefully. For us, that is of huge importance. Alongside that comes safety and quality. We have a lot of demands in our procurement and are also looking at factors such as the balance sheet structure.

Caroline Liinanki: Do you think

having such a large focus on price is a

good thing?

Agneta Wilhelmson Kåremar: Sometimes I get tired of it. Private companies also end up looking at costs, because you want quality at a good price. But I think we are forced to consider the price more than we should have to. If you only look at costs you will see that Swedish custodians have VAT of 25 per cent included in the price. When compared with UK custodians who have no VAT, I don’t think it is fair for the Swedish custodians.

Marie Schöllin: I believe that this is only a matter for state or government bodies like the AP funds. It is not the case for others and we would have to add VAT to our invoices.

Susanne Sørensen: It’s always very interesting to hear what other people think. People from different organisations have different requirements and needs and every fund chooses a custodian accordingly. The stability and experience of the business is very important. It’s also fundamental that the core operations work. You mentioned partnership, which is something that we see as extremely important. The dialogue with our clients and the partnership and transparency around that is very important. As a custodian, you cannot continue servicing the client well if you do not understand what their needs are. You are not going to be able to keep up with their needs and the direction they are heading in.

Caroline Liinanki: Are there any criteria that investors should take into consideration more when choosing a custodian?

Susanne Sørensen: The way that assets are kept safe is extremely important. We come across a lot of questions from our clients, who are asking us how that is done. For example, if it’s in an account where there is no segregation of the client’s assets and proprietary assets. That’s an extremely important consideration for clients to have. It’s also important how the safety net is managed and how the sub-custodians are managed, because some clients have no direct contact with the sub-custodian. How comfortable are they with the whole network that is out there and how risks are being managed?

Caroline Liinanki: What are the procedures for choosing a custodian?

Marie Schöllin: Choosing a custodian is not the core business in our operation, so we co-operate closely with consultants that have deep knowledge of the custody business. You need a lot of knowledge to understand the custody business and the risks involved and we use consultants to help us in evaluating custodians. They also keep us updated on the current custody market situation.

Per-Ola Jeppsson: I think that’s the best way, because it’s not really fair to ask operations to have all the knowledge to make the decision – and it is a vital decision to make. Therefore, you need to have as much information as possible to make a good choice.

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