Custody & Asset Servicing interview questions

Positions and holdings, corporate actions, and reconciling records against a custodian.

3 questions in Capital Markets.

Capital MarketsA 19-minute read on how the topic fits together, before the questions.Capital markets fundamentals59 short answers on one page, for revising rather than studying.

medium1

mediumScenarioConcept

A client says your position does not match their custodian statement. How do you work out who is right, and what does a corporate action do to that answer?

A position is what you have traded, a holding is what the custodian says you own, and they legitimately differ by unsettled trades and pending entitlements. Reconciliation compares both against the custodian's statements, and corporate actions break it when an election deadline is missed. Use this custody answer to show the decision, trade-off, and evidence rather than a memorised definition.

5 minmid, senior, staff

hard2

hardScenarioDesign

A dividend is declared and half the client's holding is out on loan while part of the rest is pledged as collateral. Who receives the income, who votes, and what does your system show the client?

Lending transfers legal title, so the lender receives a manufactured payment from the borrower and cannot vote the lent stock. Whether a pledge does the same depends on whether it is a title transfer or a security interest. The client still needs one economic position, with the legal breakdown reported underneath it.

6 minmid, senior, staff

hardDesignScenario

A corporate action is confirmed with an effective date in the past, after you have already struck positions and sent statements. How does your system cope?

By storing when something became true separately from when you learned it, so the old report stays reproducible while the corrected position takes effect from the event date. The engineering work is in the fan-out to everything already derived from the wrong quantity, not in the entitlement posting itself.

6 minmid, senior, staff