On behalf of its clients, the Bank of Jerusalem deals with securities, foreign currencies and derivatives, some of which are traded on various stock exchanges, and some – in OTC transactions – through a variety of custodial financial institutions that hold securities and cash in various currencies for the Bank of Jerusalem, as specified below:
| Activity / Type of security | Custodian |
| Derivatives, stocks, foreign bonds | Interactive Brokers |
| Foreign bonds | EuroClear |
| Stocks, bonds | Merrill Lynch |
The Bank serves as an intermediary that selects third party custodians for its clients for these services. Bank of Jerusalem acts with diligence, safeguarding the rights of its clients, as well as ensuring its obligations of prudence and reliability for them.
Principles on which the Bank of Jerusalem bases the above-mentioned obligations:
- Bank of Jerusalem has a coherent policy with regard to selecting and contracting third party custodians. The policy specifies criteria for selecting a third party custodian and terms of engagement with it, which include, among other things, a reference to its financial strength, its ability to provide a level of service that matches the requirements of the Bank, legal responsibility arrangements between the Bank and the custodian, the regulations that apply to the custodian in the countries in which it operates on behalf of the Bank of Jerusalem and more.
- Bank of Jerusalem keeps track of the activities of the third-party custodian according to the methodology set out in the Bank policy that includes ongoing monitoring of third-party custodian financial stability, review of current information published about it and relevant to its activities on behalf of the Bank of Jerusalem, and more. The results of the monitoring are presented before the Bank's Board of Directors each year for examination.
- Bank of Jerusalem conducts ongoing monitoring of its operational activities related to third-party custodians that include, among other things, regular adjustments of securities and foreign currency balances.
- Once a year, the Bank of Jerusalem appoints an independent accountant that conducts an audit of the Bank's and the third party custodians' activities, examines the Bank's monitoring activities and submits a report on its findings to the Board of Directors.
- The Bank may consider different and/or further criteria, instead of or in addition to the aforementioned; and the monitoring methodology may include other and/or further aspects in addition to the aforementioned; all according to the needs, characteristics and circumstances required in connection with any third party custodian and the type of activity it requires.
- The above information, including the identity of the third party custodian, may change at any time, at the sole discretion of the Bank of Jerusalem and subject to the provisions of the law. In addition, it is clarified that the third party custodian may act through a sub-custodian.
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