Who is a custodian? State the obligations & responsibilities and net worth requirement for custodians.

Who is a Custodian? A custodian is a person who carries on or proposes to carry on the business of providing custodial services to clients. The custodian primarily keeps custody of the securities of the client. Additionally, the custodian provides incidental services such as maintaining the accounts of securities of the client, collecting the benefits of the rights accruing to the client in respect of securities. Every custodian should have adequate facilities, sufficient capital, and financial strength to manage the custodial services. The SEBI (Custodian) Regulations, 1996 prescribe the obligations and responsibilities of custodians. Obligations and Responsibilities of Custodians Every custodian shall abide by the Code of Conduct. If a custodian carries on any activity besides acting as a custodian, the activities related to its custodial business must be separate and segregated from all other activities. Every custodian must have adequate mechanisms for reviewing, monitoring, and evaluating its controls, systems, procedures, and safeguards. No custodian shall assign or delegate its functions as a custodian to any other person unless that person is also a custodian. Every custodian shall open a separate custody account for each client, in the name of the client whose securities are in its custody, and the assets of one client shall not be mixed with those of another client. Every custodian shall enter into an agreement with each client on whose behalf it is acting as custodian. Every custodian must have adequate internal controls to prevent any manipulation of records and documents, including audits for securities, goods, and rights or entitlements arising from the securities and goods held by it on behalf of its client. Every custodian shall maintain the records and documents. Every custodian shall appoint a compliance officer responsible for monitoring compliance with Acts, rules, regulations, notifications, guidelines, instructions, etc., issued by SEBI or the Central Government, and for redressal of investors' grievances. Where any information is called for by SEBI, it is the duty of the custodian to furnish such information within a reasonable period as SEBI may specify. Net Worth Requirement for Custodians The minimum net worth requirement for custodians is ₹50 crore .