DEFINITION of Corporate Agent
A corporate agent is a type of trust company that acts on behalf of corporations and some forms of governmental entities. Corporate agents provide various types of banking services for corporate clients, such as check clearing, payment of interest and dividends and stock purchase and redemption. They can also collect taxes on behalf of governmental agencies.
BREAKING DOWN Corporate Agent
Banks can act as corporate agents in order to generate additional revenue. This diversifies their income stream away from just the retail banking sector and gives them a more stable revenue base. Most of the services that corporate agents provide are noncredit services, which means the service doesn't involve any extension of credit.
As noted above a corporate agent is a form of trust company. A trust company is a legal entity that acts as a fiduciary, agent or trustee on behalf of another person or entity. Services include but are not limited to acting as a custodian for trusts and estates, asset management, facilitating stock transfers, beneficial ownership registration and other related arrangements. While trust companies often support individuals (generally, high net worth ones) in managing personal assets, corporate agents will liase with corporations.
Example of Corporate Agent
Citibank’s Agency and Trust division delivers agency, fiduciary, tender and exchange, depositary, custody, and escrow services. Citi Agency and Trust serves a over 2,500 clients, including corporations, financial institutions, and public sector entities. Operating in both developed and emerging markets, this division administers more than US $4 trillion in assets. Citi Agency & Trust sees itself as a one-stop solution for a range of of capital markets transactions. Primary offices are in New York, London, California, São Paulo, Mexico City, Dubai, Moscow, Hong Kong and Seoul. Citi’s network of technical specialists and client service professionals globally have expertise in local markets at country and jurisdiction levels.
Clients of a corporate agent may receive access to state of the art technologies in the market, including specific analytics and reporting tools. Citi’s Agency and Trust investor reporting system is administered online and provides clients immediate access to detailed deal information, along with automatic email updates and customization around particular portfolios.
A specific example of a service Citi and other corporate agents may provide clients structured finance services. Collateralized debt obligations (CDOs), synthetic financial instruments, Structured finance is a highly involved financial instrument usually only appropriate for large financial institutions or companies that have complex financing needs.