What is the primary purpose of an Accredited Third-Party Custodian in a UITF?

The primary purpose of an Accredited Third-Party Custodian in a UITF is to hold securities for safekeeping. This role is crucial for maintaining the integrity and security of the assets within the trust. By using a third-party custodian, UITFs can ensure that the securities are protected from theft, loss, or mismanagement.

Custodians provide a layer of separation between the fund's assets and the fund managers, which helps in maintaining transparency and trust in the management of the fund. This arrangement also allows the UITF managers to focus on investment strategies and performance while relying on the custodian's expertise in safeguarding and administrating the securities.

While compliance with regulations is an important aspect of custodial services, it is more of a secondary function compared to the primary responsibility of safekeeping. Custodians also do not engage directly in client assessments, as that typically falls under the purview of financial advisors or fund management.