Andrew Allen of RBC Investor & Treasury Services and Harpreet Ahuja of HSBC Securities Services were appointed to the ACSA Board in November. This followed Marian Azer and Peter Snodgrass both retiring from the Board. Marian and Peter have provided very valuable contributions to the Board and wider industry over many years and we thank them for their service.
Sally Surgeon of Northern Trust has been elected Deputy Chair of ACSA replacing Marian in this role.
Welcome Andy and Harpreet, and congratulations Sally!
A comprehensive review on the state of crypto assets from a custody and asset servicing perspective has been prepared by the International Securities Services Association (ISSA) Crypto Assets.
Let me know if you think this is a topical from an Australian perspective and possible role for ACSA is establishing awareness and standards.
TRANSFERS – NO MORE PAPER
An important milestone was achieved in December with the ASX announcing changes to the rules for issuer sponsored to CHESS transfers. This provides for consistency between non-broker and participants and ability to process electronically rather than paper to registry.
This positive change is due to some strong advocates within our Operations Working Group and a credit to the ASX for retaining focus on this “business as usual” opportunity in parallel with other significant change programs.
2020 HINDSIGHT
This cliché will become reality at the end of next year when we reflect on the year that was. Which predictions turned out right, which decisions were winners.
One thing you can predict with certainty is the satisfaction of getting involved in an ACSA working group – make a contribution, network with your industry peers, tilt the dial on industry change.
Additional task forces and sub-groups are formed to focus on specific industry issues as they arise.
Talk to an ACSA Executive Member, Working Group Chair, give me a call or email admin@acsa.com.au outlining your area of interest.
CHESS REPLACEMENT – APP OR PLATFORM
The ASX continues to inform the market on progress of the CHESS Replacement Project, including an update for issuers in November. Of interest is the schematic below showing the new solution in two parts – the Application (“app”) that will deliver the CHESS Replacement services to the market, plus a Platform infrastructure on which other apps can be built. The scope of these other apps is not limited to post trade securities servicing, but in principle any industry vertical that can benefit from a distributed technology architecture.
Nominations are now open for ACSA Awards 2020. The Awards recognise outstanding individual contribution to the Association, wider industry and key stakeholders.More information can be found atAwards 2020, including the past winner’s Roll of Honour.
Any person who makes a significant contribution to the industry and Association is eligible. Information on the process and nomination form can be found at Nomination Form and note that the closing date for nominations is Friday 24 January 2020.
The Awards will be presented publicly at the upcoming Investment Operations Conference IOC in Sydney on the 11 February, 2020.
From the Chief Executive
Welcome to the December 2019 edition of industry wrap from the Australian Custodial Services Association.
Makingpredictions is a dangerous game. It’s always better to do so with hindsight, but let me share some thoughts on trends that have more than an even chance of affecting our industry in the year ahead:
Twin peaks of scale versus mass – around 30 mega institutions will emerge as a result of fund consolidation, under new management. At the same time, a third of the wealth market remains in self-managed superannuation funds (SMSF). The mega institutions with genuine scale will drive service differentiation, including the potential for increased component souring. The SMSF sector, on the other hand, offers mass but remains challenging to scale - distribution remains the name of the game.
Regulatory costs rising – expectations that industry can continue to absorb the costs of regulation will be tested. Funds and their service partners may reach saturation point in the ability to respond to change and implementation. As new regulations are added, few are removed – this bakes in cost and operational risk. The regulatory pendulum will not swing back in 2020, but will hopefully reach its zenith.
The true power of blockchain – the CHESS Replacement Project is a very public example of the impact to back and middle office transformation enabled by distributed ledger technology. Custodians are well placed to drive this change and embrace new industry models for post-trade servicing. Increased tokenisation within trusted networks, and regulatory certainty, will bring expanded efficiency to other asset classes.
Rebels with a cause – the passion of millennials, powered by social media, continues to create a new political reality. Social and environmental issues abound. Scrutiny is focused on institutions with high expectation they will “walk the talk.” It is likely that the reputational risk frameworks that have been found wanting for corporations will extend to funds. ESG and member engagement will be taken to a whole new issues driven level.
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