ICELAND - Iceland's second-largest pension fund, the 133 billion-crown (1.5 billion-euro) Lifeyrissjodur Verzlunarmanna or Pension Fund of Commerce, has awarded custody to Brown Brothers Harriman.

BBH said it would provide global custody and fund accounting services to the fund. It is the firm's first appointment in Iceland.

"BBH's reputation in the industry and its dedication to building lasting client relationships separated the firm from the field of competitors," said Thorgeir Eyjolfsson, managing director of the fund.

"The bank's comprehensive suite of products and proven back office capabilities were a crucial factor in the selection process."

"We are extremely pleased Pension Fund of Commerce has chosen to partner with BBH as we continue to expand our growing presence in the Nordic region," said Annika Larsson, BBH vice president and head of relationship management for the Nordic region.

The fund was set up in 1956 and is a multi-employer scheme for employees of offices and stores in and around Reykjavik.

At the end of 2003, 24% of total assets consisted of foreign equities, 13% domestic equities and the rest domestic bonds.

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