Cambodia's central bank has selected Bank of New York Mellon (BNY Mellon) to act as the global custodian of its foreign reserves, it said in a press release yesterday.

“After a rigorous selection process, the National Bank of Cambodia believes that BNY Mellon’s custodian service meets all our stringent criteria and is deemed to be the safest custodian available for our foreign reserve’s assets,” it said.

The tie-up with US-bank culminated after a months-long diligence processes conducted by both sides. BNY Mellon, for its part, also conducted an assessment of the central bank in light of its compliance with US laws on anti-money laundering.

Chea Serey, director-general of the National Bank of Cambodia (NBC), said the custodian service would help the bank manage its foreign reserves. Its role would include cash management, securities position monitoring, trade settlement, corporate actions, compliance and risk management, and reporting.

“By acting as the custodian, BNY Mellon will help NBC keep track of the current position of its portfolios, provide accounting service for the funds, performance evaluation of the external fund managers, monitoring risk and compliance as well,” she told the Post.

“These reports will be transparent and trustworthy, as they are produced in accordance with the IFRS.”

Serey said the delegation of central bank “housework” to the US bank would not diminish the NBC’s control over how Cambodia’s foreign reserves are utilised.

“Acting as the custodian helps to service the flow of managing the foreign reserves, while it does not [allow them] to make any strategy or investment decisions,” she said.

“It is the NBC team who will determine what to do, when to do, and how to do it.”

BNY Mellon was formed in July 2007 as the result of the merger of The Bank of New York and Mellon Financial Corporation. The investment company has $1.7 trillion under its management, and $28.6 trillion in assets under custody or administration.

Serey said the selection of BNY Mellon would improve the prestige of the NBC on the international stage and improve the central bank’s performance.

“BNY Mellon is consistently providing the best service to its clients and it is ranked as one of the top service providers in the field,” she said.