What do you mean by custodial services? What is their significance?

What do you mean by custodial services? What is their significance? 

Ans. As the name suggests, services of providing for custody of documents is named as custodial services. A custodian is an intermediary who keeps the accounts of his clients. He maintains the scraps of clients in custody. 

There are very important for capital markets and companies because they help in safe keeping of share certificates and trustee for the same. Providing ancillary services like physical transfer of share certificates; Collecting dividends and investment warrants; Confirming to transfer regulations; Updating clients on their investment status; and Claiming benefits on behalf of its clients like bonus issue or right shares.