Hintz said British-based Standard Chartered is an important agent bank for U.S. custody banks such as Bank of New York Mellon Corp, JPMorgan Chase & Co and State Street Corp. Standard Chartered provides the banks important access to central securities depositories in mainland Asia and Africa.

Hintz said in a research note that the U.S. custody banks rely on extensive sub-custodian networks to pass on economies of scale and scope to big institutional clients.

"If a sub-custodian were to be found guilty of an internal conspiracy to hide prohibited transactions from U.S. regulators, U.S. global custodial banks exposed to that sub-custodian may fall under increased scrutiny from their fiduciary clients," Hintz said in his note.

"Among the more severe consequences, exposure to Standard Chartered could result in reputational damage and potentially negatively impact the ability of a U.S. global custodian to win new mandates from public funds and other fiduciary clients."

Meanwhile, some sub-custodians could benefit from the upheaval at Standard Chartered if U.S. custody banks seek replacements. Hintz said potential beneficiaries include HSBC Bank Plc, Deutsche Bank AG and Citigroup Inc. He also said Standard Bank Group Ltd, which split from Standard Chartered in 1987, plays a big role in Africa for BNY Mellon and could pick up more business.

The New York State Department of Financial Services said on Monday that Standard Chartered "schemed" with the Iranian government, which is subject to U.S. sanctions over its nuclear program and hid 60,000 secret transactions to generate hundreds of millions of dollars in fees over nearly 10 years. The regulator has threatened to tear up Standard Chartered's state banking license for allegedly hiding $250 billion in transactions tied to Iran.

Hintz said JPMorgan and State Street each have extensive operating reliance on Standard Chartered as a sub-custodian in a number of markets, such as India, Hong Kong, Thailand, Ghana and Zambia. BNY Mellon has exposure in Bangladesh and Taiwan, Hintz said.

JPMorgan and BNY Mellon declined to comment. State Street was not immediately available to comment.

(Reporting By Tim McLaughlin; Editing by Leslie Adler)