The broker uses a third-party custodian, usually a division of a major global bank that offers such services. However, some international brokers have local subsidiaries that perform custody in some or all of their markets. Although supervisory authorities and exchanges regularly audit the nominated accounts, the process is not carried out on a daily basis. Since a stockbroker can at any time move or sell shares of Nominee accounts, there may be fraud. This is especially common when a company is on the verge of bankruptcy and needs cash or assets to honor its commitments. A stockbroker`s records can change, making it more difficult to determine which investors have assets in a Nominee account. The employee, not the custodian, may be required to keep all records confirming that the distribution has been exempt from tax. It could also be left to the worker, not the custodian, to determine what income taxes are due on the distribution and whether there would be tax penalties. Nor is the depositary required to withhold any part of the distribution that would be used to cover taxes due on income.
If the account holder died, the custodian could be responsible for liquidating the funds in the account and then be held responsible for distributing the assets to the beneficiaries according to the parameters of the deceased`s estate. A conservation agreement is an agreement in which an asset or real estate is held in the name of the beneficial owner (beneficial owner).. . . .