CUSTODIAL RECEIPT

A receipt representing a security held by a custodian or transfer agent. As such, it represents ownership of the security by the depositor. A security in custodial receipt form is usually non-transferable.

In the municipal bond market, custodial receipts refer to securities that represent the right to receive future principal and interest payments on municipal obligations underlying these receipts. In a typical custodial receipt arrangement in this market, an issuer or owner of a municipal obligation deposits it with a custodian in exchange for two or more classes of receipts.