STANDARD Chartered's decision to move the senior management of its Equitor financial services division to Singapore is much more significant than the small number of people being shifted might suggest. As one of the front-line providers of custodian services for fund managers, Equitor is very much part of the fund management and financial services sector in Hong Kong. Despite invitations and incentives, Singapore's ambitions to be a global fund management centre are still a long way from being realised. It can be argued that Hong Kong is where the money is, and Hong Kong is where the serious players still keep their main operations. About 100 managers may have put up their signboards in Singapore, but few regard it as their main gateway to the region. This is of less importance than it seems. The main clients for regional custodians are not regional funds, but the global custodians that handle billions of dollars worth of clients' money and which are based in the US, Europe and Japan. Equitor's main competitors in the fight for regional custody are Hongkong and Shanghai Bank, with its Hexagon system, and Citibank. It is inconceivable that Hongkong Bank would move its Hexagon management to another city in the region - it has even strongly denied that the merger with Midland might see a shift in emphasis towards London. Citibank, as a combined global and regional custodian, has a very strong presence in Singapore, but its regional management is firmly based in the territory. In the business of custody - the administration of funds' assets - it does not matter where the computers are. Communications networks mean they could be in Greenland or Glasgow as easily as in Hong Kong, Edinburgh or Boston. But where the people are does matter. Custody is a highly competitive, service-led game. The customer is always right, and must be accommodated at all costs, or they could take their business elsewhere. It is also cost-competitive. Many of the regular custodial services being provided are so standard that they are a commodity item, and are priced as such. The only way to keep ahead, and to keep the margins on fees growing, is to improve the services, add more bells and whistles to the computer programs, and listen to the clients. This Equitor has done. Its recent upgrading in the rankings of providers of custodial services is a measure of how it has come from behind to challenge the more established players such as Hongkong Bank and Citibank. Obviously the managers do not believe they are putting their successes at risk by removing themselves from the financial hub of the region. Their faith in their communication systems must be immense, and they will no doubt be leaving a squad of capable account handlers behind. But when the big global custodians jet in to Hong Kong from the US and London, they know the chances are much higher of finding that the senior guys with whom they have always dealt are not at home - or at least, home is now several hours away. However, there must be factors which offset this mutual inconvenience. One could be the opportunities that are springing up. China may be tomorrow's equity story - and few have equalled Standard Chartered's commitment to the mainland's fledgling stock market - but India is already happening. It has thousands of public companies, it is fast opening to foreign investments, funds are targeting it - and Barton Biggs has pronounced it exciting. For a custodian, having its senior management equidistant from Bombay and Hong Kong could make a lot of sense - and Equitor is already strong on the ground in the sub-continent. The second, more ominous factor that looms is cost. Hong Kong is becoming an extremely expensive place in which to keep top talent, and the costs seem to be going only one way. Singapore may not be the cheapest city in the world, but it is beating the territory. And for those who do not have to worry about the peculiarities of the Government, it is a highly efficient centre. As costs in Hong Kong rise, the attractions of Singapore improve - as do those of other regional centres. Although Kuala Lumpur or even Manila do not seem obvious alternatives now, another decade could change that. Before the Standard Chartered move is shrugged off as a small tactical switch, the implications of it being repeated by a lot of other top-flight teams should not be overlooked.