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IPE special report May 2018

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Six custodians appointed to national LGPS framework

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Six custodians have been appointed to a framework agreement accessible by all of the UK’s local government pension schemes (LGPS).

The tender, launched in April by lead authority Norfolk County Council, followed a similar four-year framework for investment consultancy services.

In a statement, the national LGPS framework group said the custodian arrangements would be accessible from mid-November, allowing interested funds to bypass individual tenders if they require a new custodian.

BNP Paribas Securities Services, one of the six companies appointed, said its inclusion would open the door to access the sizable LGPS market.

BNY Mellon, HSBC Securities Services, JP Morgan, Northern Trust and State Street were the other providers selected.

The seven local authorities – Norfolk, Cambridgeshire, Northamptonshire, Lincolnshire and Buckinghamshire county councils, as well as the London boroughs of Hackney and Croydon – said they would next launch a national framework agreement for legal services.

The group said the legal framework would build on the experiences of a previous framework by funds in the south west of the UK, expiring in 2015.

One of the funds involved in the south-west tender, the Environment Agency Pension Fund, said it would join the group to support the new framework, as would Dorset and Scotland’s Lothian.

Lothian previously ran a framework agreement covering several funds, appointing Hermes to provide shareholder engagement services for itself and three other LGPS.

Readers' comments (2)

  • Strange that of the six custodians appointed to national LGPS framework no local UK organisation is selected.

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  • That's because there are no "local UK organisations" that can do the job. There are no UK global custody banks.

    The provision of custody services has been overrun by predominantly American providers using a predominantly American model, with the notable exception of one. But this is why share voting is so deficient, because the identity of investors voting is masked through a pooled nominee (the US model), and removes their choice over who it is that processes their voting for them.

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