On 13 November 2020, ACSA hosted a webinar for Member senior representatives. Guest speakers Greg Bright (senior financial journalist) and Linda Elkins (partner, KPMG) provided insight on what clients want and key trends in the superannuation sector.
The webinar included audience polls, with the following question on the forces shaping superannuation investment.
*Respondents could select more than one answer.
A follow-up questionnaire asked Member executives for feedback on ACSA’s focus and effectiveness. Guidance included that ACSA remains on the right track in terms of focus
on efficiency and pursuit of positive systemic change, and that the Association’s advocacy presence continues to grow. Additional assessment of regulatory direction
was an area for additional focus going forward.
NEW RECIPROCAL MEMBERSHIP WITH ISSA
ACSA is now a member of the International Securities Services Association ISSA. The mutual membership approach allows
for knowledge sharing and co-operation in areas of common focus.
For example, the ISSA Corporate Actions and Proxy Voting Working Group is actively reviewing a number of areas that resonate with ACSA’s local priorities, include proxy
voting market process and beneficial owner disclosure.
At a more strategic level, ISSA recently released a white paper on the Future of Securities Services. The paper is the culmination of a major project undertaken by ISSA members with the assistance of consultancy Oliver Wyman. Many of the themes in the ISSA paper (technology,
data, lessons learned from the pandemic) align to the ACSA strategic agenda, but there with some interesting differences. For example, ISSA flags increasing demand
for cypto currency and digital assets, divergence of regional regulation, and challenges to global operating models as key from an international perspective.
SUPERANNUATION DATA TRANSFORMATION
The practical impacts of APRA’s Superannuation Data Transformation (SDT) Project is a current hot topic. With the support
of the Regulatory Working Group, ACSA made three submissions to APRA during the consultation period that ended on 13
November. The consultation process, draft regulations and explanatory material can be viewed at APRA SDT.
While members of ACSA are not the subject of the regulation, many member firms are engaged by superannuation fund clients
to assist in meeting their regulatory reporting obligations.
ACSA has provided feedback on both the principles that we believe should guide regulatory data frameworks, and also specific
practical examples of where the new regulations could create significant implementation challenges.
ACSA has suggested further industry consultation, including workshops, to identify pathways for efficiency, consistency
and robust application of the new data requirements.
For ACSA submissions to APRA on Superannuation Data Transformation (Topic 4 – Expenses, Topic 5 – Asset Allocation and
Topic 7 – Fees and Costs) see Submissions.
ASX ENGAGEMENT
ACSA has undertaken significant engagement with the ASX over the past 12 months on a number
of fronts. As results, a positive relationship that has enabled full and frank sharing
of concerns and opportunities in post-trade servicing efficiency continues to grow.
üAdditional scope included in Day 1 of CHESS Replacement, focus on risk
and system-wide testing recommendations accepted in re-set
xPayments leg of Day 1 release omitted
üCorporate actions automation continues as a BAU activity by the ASX offering
potential for systemic improvements
üSenior dialogue firmly established (MD and COO regular meetings, Business
Committee representation)
üListing rule changes to regulate deferred dividends (expect Q1 2021 release
to the market following ASIC approval)
üAvoiding use of cheques supported via ASX market communications
üRepo linked trades – industry dialogue with AFMA and Austraclear improvements
üPreliminary discussion of institutional managed funds initiative
The outcome of the most recent ASX Consultation on the CHESS Replacement Revised Implementation
Timeline was released on 28 October 2020. The paper can be downloaded from Chess Replacement Communications.
The go-live date for CHESS Replacement is now April 2023.ACSA has consistently advocated
the need for certainty in functional scope (including genuine improvements), committed
timeline, pricing fairness and transparency, and an industry-wide risk perspective.
Although some functional improvements have now been added to “Day 1”, the omission of electronic
acceptance and payment for entitlement offers is out of scope, and no firm date has
been set for future inclusion. ACSA views this as a missed opportunity for further
corporate actions automation.
We will also continue requests for full functional roadmap for CHESS Replacement and transaction
level pricing, along with better industry understanding of the systemic potential for
non-CHESS related capabilities of the DLT platform.
Overall, ACSA will continue to focus on encouraging dialogue with the ASX and broader stakeholders
across all relevant markets and post trade services. This will include practical operations
focus via the Operations Working Group, plus governance focus with the ASX executive
and key regulators.
PROXY VOTING
As part of the Exposure Draft Consultation - Corporations Amendment (Virtual Meetings and
Electronic Communications) Bill 2020, ACSA provided a submission to Treasury and included
the strong recommendation that a standard (regulated) record date for voting entitlements
be added to the Corporations Act. The submission can be viewed here.
Additional industry discussion and advocacy to policy makers is underway to maximise the
opportunity for positive change. Improvements to transparency, efficiency and robust
lifecycle tracking of voting would bring our market into line with best practice, and
offer benefits for all stakeholders.
COMING UP
It is also time to look back at the extraordinary year that was and nominate those who
went above and beyond for our industry via an ACSA Award. See Awards for details.
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