IN THIS ISSUE

• Welcome to 2022
• ACSA Awards
• Portfolio Holdings Disclosure
• ASX Corporate Actions Survey
• A global perspective
• In focus – Danielle Gerace
  

SEASON'S GREETINGS FROM THE CHAIR

Welcome to 2022 and the first Industry Wrap for the year.

As the holiday season comes to an end, COVID 19 remains a significant challenge affecting how we work (and live) and there is no doubt that as an industry we will manage through and position ourselves positively for the future where new ways of doing business will continue to deliver value to our people and clients.

The hot topics for 2022 are expected to include continued data access requirements, institutional utilisation of digital assets, ASX CHESS replacement, and ongoing regulatory change. (No doubt there will also be issues for the industry to consider that are unexpected, there always is!) ACSA is well placed to address the opportunities and challenges in the coming year through a combination our working groups and taskforces.

The ACSA executive board is meeting in February to evaluate our mission and strategy given the 2022 industry emerging trends, opportunities, and potential challenges. We will update you in February on the outcomes of the executive board discussions.

The Members and Services Working Group is developing a new webinar series to create thought leadership content for ACSA members. Kept an eye out for the new webinar series to commence in late February.

Best wishes for 2022.

Reminder - ACSA Awards

Nominations are now open for ACSA Awards 2022

The ACSA Awards recognise outstanding individual contribution to the Association, wider industry and key stakeholders. For over 10 years these coveted Awards have showcased outstanding individuals and the value they bring to industry collaboration and focus on positive change.

Eligibility
Any person who makes a significant contribution to the industry and Association is eligible.

Nomination Process
Nominations should be made by completing the form Nomination Form and return no later than 3 February 2022 via email to:

Kate Dent
ACSA Executive
admin@acsa.com.au

Nominations must include details of the individual’s specific contribution (see instructions regarding the citation).

Full details of the process and the Roll of Honour of past recipients can be viewed at 2021Process.

Award Presentation
Recipients will be determined in February and the Awards will be presented publicly at the IOC Conference in Sydney.

For more details, please refer to the nomination form. Also feel free to contact myself or Kate should you require additional information.

Portfolio Holdings Disclosure (“PHD”)

Through the ACSA regulatory working group, ACSA members have been working closely with Treasury, ASIC and other industry bodies, on behalf of ACSA member clients, on the implementation of the PHD regime for the first reporting period, 31 March 2022. ACSA continues to liaise with ASIC and other industry bodies on the efficient implementation of the PHD regime on behalf of ACSA member clients.

Background

Chapter 7 of the Corporations Act 2001 provides that the trustees of registrable superannuation entities (RSEs) must make certain information about the RSE’s investment options publicly available on the entity’s website no later than 90 days after a specified reporting day (the portfolio holdings disclosure regime).

The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Act 2019 amended the information about portfolio holdings available for superannuation fund members and other stakeholders. These measures have subsequently been amended by the Treasury Laws Amendment (Your Future, Your Super) Act 2021.

The Corporations Amendment (Portfolio Holdings Disclosure) Regulations 2021 supports the portfolio holdings disclosure regime by prescribing the manner in which information provided under the portfolio holdings disclosure regime must be organised.

The regulations detail the way information regarding the RSE’s portfolio holdings that must be made publicly available is to be organised. However, in addition to these prescribed disclosures, superannuation trustees may provide supplementary information regarding the portfolio holdings of the RSE’s products in a separate public disclosure.

The amendments made by this instrument apply in relation to reporting days that occur on or after 31 December 2021 or the commencement of the Schedule, whichever is later.

These regulations were publicly consulted on from 28 April 2021 to 25 May 2021. Following the consultation, changes were made to the regulations and a second round of public consultation was held between 17 August 2021 and 31 August 2021. Following the second round of consultation, the draft regulations were amended to provide for greater aggregation of certain investment items and to better outline the effects of derivatives on the total portfolio holding of the investment option.

ASX Corporate Action Survey

The ASX recently conducted a survey, managed by the ValueExchange, to garner feedback from industry participants, including ACSA members, to help shape industry perspective on how and where we can transform Australian corporate action processes.

The survey represented an opportunity for ACSA member to benchmark their views against peers and shape a new perspective on how Australian corporate action processes might improve.

ACSA members are invited to industry webinars to understand the findings of the survey when finalised. To register for the Webinar click here.

Background

This program is sponsored by ASX and managed by the Value Exchange, a specialist market research and sales enablement firm for the capital markets.

The aim was to provide market participants across all parts of the Australian investment cycle detailed, statistical insights on where and how we can improve our corporate event data processing.

This survey will be combined with a global benchmarking program conducted in July 2021, to provide Australian financial market participants with a set of granular, personalised benchmarks. 

Global Perspective

 In 2020, ISSA launched a Distributed Ledger Technology (DLT) survey to understand the realities of DLT adoption within the market. One of the advantages highlighted was the ability to settle securities against Wholesale Central Bank Digital Currencies (CBDC). 

CBDC and stablecoins (SC) are being investigated, experimented with and, in some cases, already in use within the capital markets). The adoption of CBDC and SC offers potential advantages over today’s settlement methods. This is particularly apt when discussing the settlement of securities on DLT, as the simultaneous exchange of CBDC/SC and securities tokens is a key attribute of a DLT solution and the creation of a Delivery versus Payment 1 (DvP1) (in central bank money or commercial bank money) settlement solution.

Interest in CBDC and SC is growing across the globe, with several central banks embarking on CBDC investigations and projects, often in conjunction with the Bank for International Settlements (BIS). SC are continuing to come to market in a variety of designs and are under regulatory focus as innovation in this space takes shape. 

The ISSA DLT Working Group has built on their prior publications and has undertaken an analysis of the potential CBDC (Central Bank Digital Currencies) implications on securities services to deliver a “Blueprint for CBDC in Post Trade Settlement”. ISSA are happy to help the industry in gaining “as complete a picture as possible”. (Note SC are not the focus of the Blueprint.)

If you are interested to know more, you can access the Blueprint here.

IN FOCUS

Danielle Gerace

Danielle Gerace is a Senior Vice President at Northern Trust. She is currently the head of Capital Markets Product covering FX, Brokerage and Securities Finance. Previously she was the APAC Head of Market Advocacy and Innovation Research focussing on the impact of emerging technology like blockchain technology on the evolution of our business and service models. 

Danielle has over 20 years' experience within the financial services industry which includes experience across the global securities and market infrastructure sectors delivering post-trade services to large and complex clients in Asia Pacific, Europe, Middle East and Africa. She has a strong focus on commercial strategy, emerging technology and innovation.

Danielle has acted as an independent consultant, advocating for market infrastructure development for the Australian securities industry. She was previously general manager for the Australian Securities Exchange's (ASX) clearing services where she led product and service innovation in response to regulatory change and competition reform. She was responsible for the market-wide move to T+2 settlements. Danielle also held several senior roles at Bank of America Merrill Lynch and BNP Paribas where she ran relationship management and service functions in international prime brokerage.

Danielle holds a Masters of Business Administration(Senior Executive Program) from Melbourne University and a Bachelor of Economics (Honors) from Sydney University.

Can you tell us about the work you currently do with ACSA as the Chair of the Digital Assets working group? 

This is the newest working group and very much reflects the direction our industry is moving. It reflects the emerging need for greater industry and regulatory advocacy as digital assets start to evolve as investible asset classes for institutional clients. 

What do you believe are the benefits of digital assets?

It is the next step in the evolution of financial assets. Distributed ledger or blockchain technology will enable us to embed intelligence in assets – data, behaviours, and asset characteristics. It will give rise to much more efficient business models around how assets trade and are serviced. For example, to trade in a global market place or distribute golden source and immutable information across multiple participants efficiently. Embedded asset characteristics can also allow for assets behaviours to be self -executing and self-governing bringing post trade compliance into pre-trade compliance whether that be regulatory or investment mandate compliance. While many people may question the validity of the current crypto asset phase, the elements of technology, trading and decentralisation is reinventing our capital markets.

You’ve had a long career in financial services, tell us about your experience and career highlights?

I’ve probably enjoyed the diversity of experiences I have had especially working internationally in Bangkok, London, Hong Kong and of course Sydney. Capital markets are ever evolving and whether that is through response to financial crisis; like the Asian financial crisis in 97 or the Global Financial Crisis in 2007; or technology like distributed ledger technology. Each stage requires us to respond, to evolve the way we serve our clients and protect our banks. I like to work at the forefront of that change. 

Why should people get involved in ACSA?

We can’t learn in a vacuum and with the amount of change our industry is experiencing industry advocacy remains a critical path to bringing our voice to change. Without the support of peers and industry we don’t get the change we need to better serve our clients. Or worst we get an overreaction to regulatory change that is detrimental, costly, or impractical. There is an enormous amount of global talent and diverse ideas in our Industry Association, and it is through that richness that we can bring forward solutions and ideas to better serve our clients.