While public servicer ratings have yet to materialize in Brazil, Standard & Poor's last week issued its first ranking for a custodian in that country. Banco Santander Brasil garnered an "Above Standard" grade for its custody and financial settlement services.
In Brazil, custodians play a key role in receivables investment funds (FIDCs), the vehicle of choice for domestic securitization. A custodian's main function is to verify asset eligibility for a fund, often acting as the backup servicer in a deal, with the originator as the primary servicer, according to a report by Fitch Ratings. A custodian also typically directs the fund's assets, including making share distributions to the investors from the collections on the pool.