What are all the roles and responsibilities of custodian? and who can eligible to be a custodian?

A custodian is a financial institution that holds and safeguards assets, such as securities, on behalf of its clients. In the context of mutual funds, a custodian is responsible for holding the securities that make up the fund's portfolio and for performing various administrative tasks such as record-keeping, cash management, and handling of corporate actions.

The role of the custodian is to ensure the safekeeping of the mutual fund's assets, to monitor compliance with regulatory requirements, and to provide regular reports to the fund's management company and regulators.

Typically, banks and trust companies are the most common type of custodians for mutual funds. Banks tend to have a wide range of services, such as cash management, securities lending, and foreign exchange services that can be useful to mutual funds. Trust companies have specific expertise in trust and estate services, and are often used as custodians for specialized funds such as hedge funds, private equity funds, and real estate funds.

However, other types of financial institutions such as broker-dealers, clearing corporations, and transfer agents can also act as custodians for mutual funds.

To become a custodian, financial institutions must meet certain regulatory requirements and be approved by the relevant authorities such as the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) in the US.

In order to be approved as a custodian, the financial institution must demonstrate that it has the necessary infrastructure, personnel, and systems in place to effectively safeguard the assets of the mutual fund and to comply with all relevant regulatory requirements. The institution must also pass regular audits and inspections to ensure that it continues to meet these standards.

In conclusion, a custodian is a financial institution that holds and safeguards the assets of a mutual fund, such as securities, on behalf of its clients. Banks, trust companies, and other financial institutions such as broker-dealers, clearing corporations, and transfer agents can act as custodians for mutual funds. To become a custodian, financial institutions must meet certain regulatory requirements and be approved by the relevant authorities. The role of the custodian is to ensure the safekeeping of the mutual fund's assets, to monitor compliance with regulatory requirements, and to provide regular reports to the fund's management company and regulators.