Fidelity Investments of Boston appointed a Citigroup unit as custodian for $35 billion of municipal and money market mutual funds Monday.
Citibank Worldwide Securities Services will provide securities safekeeping, custodial reporting, and income and corporate action processing for 36 portfolios, Citigroup said.
Citibank has been trying to increase further its global custody capabilities, which were bolstered by last year's acquisition of J.P. Morgan's global agency and trust business.
Robert G. Taaffe, a managing director at Citibank Worldwide, said this is his company's first mutual fund custody relationship with Fidelity. However, he added, "we would love an opportunity to serve them wherever they are around the world."
He declined to disclose terms of the Fidelity agreement.
Citibank Worldwide services roughly $3.4 trillion of assets around the world. Though Mr. Taaffe could not break out the mutual fund component, he said the bank views funds as "one of the fastest-growing segments in the custody marketplace."
Fidelity, which has more than $781 billion of mutual fund assets, had previously used United Missouri Bank as custodian for the funds. However, Fidelity decided it needed a custodian with more resources, a spokeswoman said. Fidelity will continue to use United Missouri for check clearing, she said.