Depositary vs. Depository: What's the Difference?
By Janet White & Aimie Carlson || Updated on May 30, 2024
A depositary is an entity or person entrusted with the custody of assets or documents, whereas a depository is a place where items are stored for safekeeping.
Key Differences
A depositary is an entity or individual responsible for the custody and management of assets or documents. They ensure the safekeeping and proper handling of the entrusted items. A depository, on the other hand, refers to a physical location or institution where items such as money, securities, or other valuables are stored. While a depositary emphasizes the role of a custodian, a depository focuses on the place of storage, like banks or vaults.
In financial markets, a depositary might be responsible for holding securities and ensuring their proper management, whereas a depository might be the actual institution or system where these securities are kept. The distinction lies in the role (depositary) versus the location (depository).
A depositary often acts in a fiduciary capacity, managing assets on behalf of others and ensuring compliance with legal and regulatory standards. In contrast, a depository provides a secure place for storing these assets but does not necessarily engage in active management or oversight.
Both terms are crucial in the context of asset management and financial transactions, with depositaries being more active custodians and depositories serving as secure storage locations. Understanding the difference helps clarify the responsibilities and roles in financial and legal arrangements.
Comparison Chart
Definition
Entity/person entrusted with custody
Place where items are stored
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Role
Custodian, fiduciary
Storage location
Context
Legal, financial
Financial, banking
Active Management
Yes, manages and oversees assets
No, primarily provides storage
Example
Depositary bank holding securities
Bank vault storing money
Depositary and Depository Definitions
Depositary
Entity holding securities for safekeeping.
The depositary manages the investment portfolio for the fund.
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Depository
Location for keeping valuables safe.
The depository stored gold bars in a secure vault.
Depositary
Entity with a duty to manage assets responsibly.
A depositary must adhere to strict regulations.
Depository
Organization providing storage services.
The bank acted as a depository for securities.
Depositary
Individual entrusted with the care of assets.
The lawyer acted as a depositary for the client's documents.
Depository
Secure area within a financial institution.
The depository's vault is highly secured.
Depositary
Person responsible for handling assets on behalf of others.
The depositary handles all transactions for the trust.
Depository
Place where documents or records are kept.
The library's depository holds rare manuscripts.
Depositary
Protector of valuable items or documents.
The museum used a depositary for its rare artifacts.
Depository
Facility for preserving important items.
The depository ensures the preservation of historical records.
Depositary
One entrusted with something for preservation or safekeeping.
Depository
A place where something is deposited, as for storage or safekeeping; a repository.
Depositary
A depository.
Depository
A place where something is deposited, as for storage, safekeeping, or preservation; a repository.
Depositary
Acting as the trusted recipient of a deposit.
The hospital was the depositary institution of our monies.
Depository
A trustee; a depositary.
Depository library
Depositary
One who receives goods or a deposit in trust.
Depository
A place where anything is deposited for sale or keeping; as, warehouse is a depository for goods; a clerk's office is a depository for records.
Depositary
A place where deposits are kept
Depository
One with whom something is deposited; a depositary.
I am the sole depository of my own secret, and it shall perish with me.
Depositary
One with whom anything is lodged in the trust; one who receives a deposit; - the correlative of depositor.
I . . . made you my guardians, my depositaries.
The depositaries of power, who are mere delegates of the people.
Depository
A facility where things can be deposited for storage or safekeeping
Depositary
A storehouse; a depository.
Depositary
One to whom goods are bailed, to be kept for the bailor without a recompense.
FAQs
Can a bank be both a depositary and a depository?
Yes, a bank can serve as both a depositary (managing assets) and a depository (providing storage).
Is a safety deposit box considered a depository?
Yes, a safety deposit box within a bank is an example of a depository.
How does a depository differ from a depositary?
A depository is a place where items are stored, whereas a depositary is an entity or person responsible for the custody of those items.
Who typically uses the services of a depositary?
Investors, fund managers, legal entities, and individuals needing asset management use depositary services.
What is the primary role of a depositary?
A depositary's primary role is to act as a custodian and manage assets or documents entrusted to them.
What types of items can be held by a depositary?
A depositary can hold securities, financial assets, documents, and other valuables.
Are depositaries subject to regulatory oversight?
Yes, depositaries are often subject to strict regulatory oversight to ensure the proper management of assets.
Can a depositary be an individual?
Yes, an individual can serve as a depositary, particularly in legal or fiduciary contexts.
How does one become a depositary?
Becoming a depositary often requires meeting regulatory standards, obtaining licenses, and demonstrating fiduciary capabilities.
What is the significance of a depositary receipt?
A depositary receipt is a negotiable financial instrument issued by a depositary bank representing a foreign company's publicly traded securities.
Why is regulatory compliance crucial for depositaries?
Regulatory compliance ensures that depositaries manage assets responsibly, protecting investors and maintaining market integrity.
What kind of security measures does a depository implement?
Depositories implement stringent security measures like vaults, surveillance, and restricted access to protect stored items.
What is a central securities depository (CSD)?
A CSD is a type of depository that holds securities to facilitate trading and settlement in financial markets.
Can digital assets be managed by a depositary?
Yes, depositaries can also manage digital assets, ensuring their security and compliance with regulations.
What documents might be stored in a depository?
Documents like legal contracts, financial records, and historical manuscripts are commonly stored in depositories.
Can a depository hold physical items?
Yes, a depository can hold physical items such as precious metals, currency, and important documents.
Do depositaries charge fees for their services?
Yes, depositaries typically charge fees for managing and safeguarding assets.
Is a depositary required for all investment funds?
Many investment funds require a depositary to ensure compliance with regulations and secure asset management.
How do depositories facilitate trading?
Depositories facilitate trading by holding securities in electronic form, making it easier to transfer ownership and settle transactions.
What role do depositaries play in mutual funds?
Depositaries in mutual funds ensure the safekeeping of fund assets, oversee compliance, and protect investors' interests.
About Author
Written by
Janet WhiteJanet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
Co-written by
Aimie CarlsonAimie Carlson, holding a master's degree in English literature, is a fervent English language enthusiast. She lends her writing talents to Difference Wiki, a prominent website that specializes in comparisons, offering readers insightful analyses that both captivate and inform.
