Working Group Updates

We’ve included a few updates on what the Custody Operations, Corporate Actions, Communications and Stronger Super Working Groups have achieved in 2015 so far.

Custody Operations WG

The Custody Operations working group has been working closely with the ASX and are a key player in the Market Implementation Group involved with the transition to T+2 cash equities markets settlements, expected in March 2016.  This will see the ASX cash equity market moving in line with other global markets and is an important step to further highlight Australia’s development on the global map.

Part of this transition will involve educating impacted parties, including the ASX, on processes around overseas investors in the local marketplace, and core capital and market reductions for clearers. The Custody Operations Working Group will continue its efforts in helping the custody industry educate clients on how the change will affect them.

Similarly, debt markets are also looking towards a move towards T+2. In 2015/16, the Custody Operations WG is part of the Australian Financial Markets Association (AFMA), who is working closely with Austraclar, Buy/Sell side, the custody industry and vendors to agree a date for implementation.

Through the Custody Operations WG, ACSA is a member of the Austraclear Advisory Committee (AAC), established last year to manage the insourcing of Austraclear code from its current external provider. As part of the AAC, the ACSA Custody Operations WG has provided valuable input and suggestions for improvements for the ASX to review and implement.

Finally, the Custody Operations WG is challenging the current physical transfer process and requirement of a ‘wet ink’ signature on transfer forms, working with share registry firms to drive the review of the relevant legislations to allow scanned copies of transfer forms to be accepted.

Implementation of this initiative would create significant processing efficiencies and cost savings for custodians, registries and customers.

Corporate Actions WG

The Corporate Actions WG also continues to liaise with regulators and market participants, in particular working with Treasury around fees for disclosure requests and the development of reforms for AGM and Shareholder Engagement.

The ASX straight-through processing (STP) announcement project went live in late 2014, although working group notes the date for online forms to become mandatory has been postponed from March 2014 to 29 June 2015.

Going forward, the Corporate Actions WG will be working with registry participants to manage the requirements caused by reduced ex trading period introduced in 2014 (from five days to three days). These discussions are ongoing, and relate to the mode of online instruction for DRPs, and limitations on receiving different foreign currencies on a single HIN.

Finally, the Corporate Actions WG have lodged a response to the ASX’s proposal to introduce diary adjustments on estimated dividends. Members are fully supportive of the ASX’s proposal, and the response highlighted ACSA’s industry standard approach to settling dividend claims. The closely related nature of the two issues provides an ideal opportunity to gain wider acceptance of the process across the industry, and the WG’s response asked the ASX to highlight the potential improvements in its final release. The Corporate Actions WG looks forward to ongoing discussions with the ASX around the ACSA standard.

Communications Working Group

The Communications Working Group has been busy in the review, development, drafting, and testing of the new ACSA website. For more detail on what has changed and how members can make the most of the new website’s functions, click this link.