Print Page   |   Contact Us   |   Sign In   |   Register
RG 133 Guides
Share |

Suspicious Matter and Breach Reporting

As providers of custodial and depository services, ACSA members will typically have obligations in their master custody agreements (or equivalent document) to notify a responsible entity (“the Client”) of material or systemic breaches of the agreement. The requirement to have such provisions in the agreement is reinforced by Regulatory Guide 133 – Managed investments and custodial or depository services: Holding assets (RG 133).
Further, ACSA members in the provision of custodial and depository services will hold an Australian Financial Services Licence (AFS Licence) authorising the provision of these services. In addition to obligations imposed on ACSA members to report significant breaches under s912D of the Corporations Act 2001 (Cth) (Act), RG 133 extends the requirement such that agreements between the Client and the custodian must contain provisions to the effect that the custodian must establish and maintain adequate arrangements to ensure that if the custodian suspects a Client (also being the holder of an AFS Licence) has not met its own obligations under the Act to report a significant breach of the Client to ASIC, then the custodian will make the necessary report to ASIC within 10 business days. Such required arrangements are not the source of any obligation to make enquiries, however, the custodian may eg. in the ordinary course of business or from another source, have both the knowledge of that breach and form such a suspicion.

 

Read the full guide here.

 

ACSA RG133 Industry Guide – Omnibus Account Section

As outlined in Section F of ASIC RG133, generally unless an exemption applies, ASIC expects that a responsible entity (R.E.) holding scheme property on trust must ensure that the property is (a) clearly identified as scheme property and (b) held separately from the RE’s own property and the property of any other scheme. Similar obligations also apply to custodians holding scheme property. 

However ASIC has acknowledged that in some circumstances it may not be appropriate to separate assets from those of other persons or schemes, as this may be inconsistent with market practice where it is likely to substantially add to the cost of holding scheme property.

 

Read the full guide here.

Special Custody Assets

ASIC Class Order 13/1413 amending Class Order 13/760 (Class Order) broadly states that Responsible Entities (REs) that do not meet the minimum net tangible assets (NTA) requirements of an NTA (the greater of A$10m or 10% of average RE revenue of the licensee) are required to hold assets with a custodian. The Class Order provides limited relief from this obligation for certain assets meeting the definition of a ‘special custody asset’ (such as derivatives) upon satisfying certain conditions as prescribed in the Class Order.

 

Read the full guide here.

Association Management Software Powered by YourMembership  ::  Legal