Third-party custodian

Custodial services are often performed by a third party to the deal. This is partly through necessity as in most cases, the deal participants do not have custodial capabilities. Additionally the third party involvement reinforces the off-balance sheet nature of the deal for the originator and clearly defines those assets associated with the particular deal. Finally the appointed custodian is generally, although not necessarily, the same entity as the appointed trustee. Hence, there is further protection provided to the investor in a default situation as the trustee effectively has control of the assets. This is a source of comfort for investors. 

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