Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What is a custodian responsible for?

1. Managing bank accounts

2. Administering real estate properties

3. Managing or administering the custody of assets

4. Providing investment advice

The correct answer is: Managing or administering the custody of assets

The role of a custodian primarily involves managing or administering the custody of assets. This task typically includes safeguarding a client's financial assets, overseeing the handling and settlement of securities transactions, and maintaining accurate records related to those assets. Custodians are essential in ensuring that assets are properly accounted for and protected against loss, theft, or fraud. In the financial and investment context, custodians act as a fiduciary, ensuring that assets are held securely and that all associated transactions comply with regulations and industry standards. Their responsibilities often extend to handling corporate actions, tax processing, and reporting to clients, all of which are crucial for maintaining the integrity and security of the client's assets. Other options like managing bank accounts or administering real estate properties do not fully encompass the scope of a custodian’s responsibilities. Although custodians may have some involvement with various asset types, their core function centers on the custody of assets rather than any particular subset of asset management or financial advising.