Bombing in Bombay Take India, a vast country with 6,000 listed stocks and a settlement system designed for individual investors and based on the physical delivery of share certificates. Bombay's stock exchange, brokers, banks and registrars made up a nice sleepy backwater until foreign investors arrived, trading stocks in large blocks. The system couldn't cope. After filling its vaults to the brim, one local custodian, an Indian bank, started storing share certificates in a trailer parked in an alley. Messengers queued up outside Bombay banks, each bearing one or more boxes stuffed with shares.
Bankers say the situation is improving.
Even so, Mr. Marson says stock transactions sometimes still take weeks to complete. When it comes to custody, Russia is as big a headache as India. Brown Brothers won't do custodial work in Russia unless a client signs a statement that he understands the risks. Still, there are problems. The head of a local brokerage firm in one of Africa's major markets is a convicted fraudster, who London brokers say is protected by his political connections.