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INDUSTRY WRAP - July 2020

Thursday, 9 July 2020   (0 Comments)
Posted by: Kate Dent
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STRATEGY

As we settle into the new normal, ACSA Working Groups are re-booting and the Board has affirmed strategy for 2020 with some key refinements based on the lessons learned from the COVID-19 Pandemic.

 

 

All ACSA Member corporate representatives recently received a questionnaire on workplace changes resulting from the pandemic disruption. Responses are intended to provide baseline (anonymised) information of the extent of changed work environment and people impact through the peak disruption period. The survey also canvasses views on which of these changes are likely to be retained and evolve further.

SUPPORT FOR STREAMLINING

Support for the ACSA Communique on Mandatory Use of Cheques was received from both ASX and ASIC in June:

  • ASX communication to Issuers in the Listed@ASX Compliance Update June Edition (17 June), Section 6 - ASX Compliance Update
  • ASIC public communication in Corporate Finance Update (Issue 1, June 2020). The section ‘Electronic options to pay and receive money’ contains a link to the ‘Mandatory Use of Cheques’ news item on the ACSA website ASIC Corporate Finance Update

 

The industry forum with share and unit registries convened by ACSA at the height of the disruption provided opportunities for practical dialogue on operational issues. 

 

Discussion in the forum amplified how a lack of standards and automation impacts the service chain when high volumes and adoption of new processes coincide with staff disruption.

 

ACSA Working Groups and Taskforces are re-booting in an effort to ensure that priorities remain relevant to the new normal, and that key learnings from pandemic disruption are not lost.

 

There are opportunities for positive change, but some real challenges to bandwidth across our industry, busy times for our key client segments, and of course year end.

 

CUSTODY OPERATIONS

The approach and background to the CHESS Replacement re-set consultation was released by the ASX on 30 June, with responses open to 28 July (see ASX Updates for more information).  ACSA is planning to make a public submission on the degree to which risks have been addressed in the overall re-set, as well as concerns that a number of key functional improvements may slip out of scope if no firm date is set for mandatory adoption. 

 

ACSA is also engaged in ongoing discussion with the ASX on the topic of Deferred Dividends – see Communique for background.  Engagement with the ASX has been positive, with a number of suggestions for potential rule changes that would address operational concerns without limiting flexibility for listed companies.

My thanks to the Operations Working Group – including executive sponsor Andrew Gibson (Citi), working group chair Scott Oakland (J.P. Morgan) and Blair Gardner (NAB) - for their expert input and advocacy on these key issues.

 

An additional area for focus, although a slower burn, is proxy voting and AGMs.  Disruptions due to COVID-19 provides a reminder of the many procedural inefficiencies of meetings and voting.  ACSA has engaged in past consultation on the key issues, and will revisit opportunities for dialogue and advocacy with relevant stakeholders over the coming quarter.

 

TAXING TIMES

There is arguably no such thing as a “usual year end”, but the combination of disrupted work patterns for clients, their custodians and other service partners and the extent of market volatility is creating added challenge.

The Tax Working Group has remained active throughout this year with regular (virtual) meetings.  Constructive dialogue has been held with the ATO to clarify key technical points on the Legislative Pipeline through 30 June, fund payment notices and estimates for overs/unders in this cycle.

Based on focus generated by the Funds Data work stream under ACSA’s Funds 2.0 initiative, a new data template for managed fund tax components has also been developed and now under the wing of the Tax Working Group.

The template aims to define a base data set needed by institutional investors to consolidate fund reporting with discrete portfolio data to produce a consolidated tax position.  It aims to provide the data for both interim and annual distributions as well as including specific data sets which support downstream withholding obligations. The template covers both MIT and AMIT funds.  A dedicated sub group with Jodie Bosler (HSBC) as chair within the ACSA Tax Working Group has been formed to move this initiative forward.

 SPRING CLEANING

Thanks to the efforts of the Members & Services Working Group, ACSA is undertaking a revamp of our website.  Everyone on our database will receive a survey this month seeking input.  It would be great to see responses from as many of our members as possible.   We will also be sharing details on how you can contribute directly to the refresh. Thank you to the working group chair Teri Thomas (J.P. Morgan) and deputy Nichole Alexander (HSBC) for driving this initiative.

For obvious reasons our normal member events in Sydney and Melbourne have been deferred, but we are hoping to bring our members together again as soon as possible.


 


Robert J Brown

 

Chief Executive Officer

Australian Custodial Services Association


 


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