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INVESTMENT OPERATIONS

ABOR: Benefits of Separating from Custody

ABOR: Benefits of Separating from Custody

INVESTMENT OPERATIONS

Government treasuries and pension funds typically use their custody banks to provide their accounting book of record (ABOR). Until recently, this was also the norm for insurance companies and corporate treasuries. But with the advent of third-party software specializing in providing investment accounting, having ABOR separate from custody is now the industry standard for insurers and corporations.

The benefits of using a third-party ABOR provider include:

  • An ABOR provider separate from custody enables a pension or treasury to independently monitor it's investment assets. That provider’s software capabilities can also deliver reconciliation of investment data in a more timely manner. 
  • Auditing is also enhanced, since a specialized ABOR software provider can generate detailed reporting that makes it easier for auditors to drill down into the data as needed. 
  • Dependence upon a particular custody bank is reduced, since the accounting software provider can work with any custody bank that a government treasury or pension chooses.

Clearwater Analytics offers a SaaS solution for automated investment data aggregation, reconciliation, accounting, and reporting. We report on $4 trillion in assets for institutional clients in the corporate, insurance, asset management, and government spaces. Clearwater is the accounting book of record for over 90% of our clients. Our users access investment data that is aggregated, reconciled, and validated daily. Our web-based reporting is available any time, any place. Auditors for our clients range from local firms to the big four accounting firms. And the over 500 custody banks that we connect with range from regional banks to the three largest custody banks in the government/pension market.

If you are interested in learning more about this issue from a former state treasury portfolio manager, read the article Is Splitting the ABOR from Custody a Fiduciary Duty?

"Clearwater is the engine that feeds our main ledger, and having Clearwater saves us all a lot of time. All our global teams use Clearwater not only for investment accounting, but for monitoring compliance with various investment guidelines. It keeps us all aware and up-to-date." - John Casale, Treasurer, STARR Companies 

Clients use the report below to compare ABOR data with custody data.

Accounting Book of Record Base Roll-Forward Report

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