In the first award of its kind in France, Banque IndoSuez has been appointed sole custodian for IBM France's seven profit-sharing funds.

Custody for the equity, bond and money market funds, which have total assets of about Ffr2bn ($340m), was previously arranged individually for each fund.

In France fund management and custody are usually provided by the same fund management institution but Paris-based IBM was prompted to move to one custodian partly because it had an unusually large number of funds.

Didier Wattelle, risk manager and pension fund adviser for IBM France, says: The new system is exceptional. It is the first time it has been done in France. We decided to change partly because we have so many funds: most companies have only one or two. We want to simplify the system and to achieve greater transparency and security for our operations."

Companies can change their fund management arrangements for such funds relatively easily, although IBM did have to select a custodian that was legally established in France.

IBM will be unable to implement a similar change for its pension fund arrangements because the liability rests not with the employer or employees but with the insurance company and custody arrangements are at the insurer's discretion.

Wattelle adds that there are no plans to change the custody arrangements for any of IBM's other funds."

Topics