In this issue

• Financial Standard custody feature - Guardians of assets
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• ACSA Thought Leadership Series – Tokenisation of Asset Management
• ASIC/ASX Advisory Board
  
• ACSA White Paper – Cyber best practice in investment communities
  
• Digital Assets – Crypto licensing senate inquiry
  
• Global Insight – ISSA Global governance survey 2023
  
• In Focus – Scott Hudson of Computershare
  

Introduction

In this month’s edition of Industry Wrap, we connect you to the recent custody industry review from Financial Standard and update you on our next Thought Leadership webinar. We also provide insight into ASIC and ASX formation of an advisory board for clearing and settlement activities in the market and highlight our recent activities with regulators on digital assets.

You will also find an outline of our industry white paper on Cyber Security and connect you to a global survey on governance.

And, this month we are also In Focus with Scott Hudson of Computershare.

Financial Standard custody feature - Guardians of assets

“In the world of financial services, custodians have long been the unsung heroes who from behind the scenes are entrusted with the crucial task of safeguarding assets. Images of steel vaults, twisted and slammed shut, buried in the basement or the strongroom of heavily guarded institutions spring to mind.

However, a rapidly evolving landscape has transcended the sector’s conventional responsibilities and seen it emerge as an innovator, driving change in the industry……”

Financial Standard recently released its Custody Feature which includes contribution from industry leaders on the current priorities and focus for the custody industry.

You can read the full feature here.

ACSA Thought Leadership Series – Tokenisation of Asset Management

The next webinar in the ACSA Thought Leadership Series is on Wed 9 August and is hosted with Calastone.
ACSA is excited to bring forward looking insights about how new operating technologies, like Distributed Ledgers, will change the way investors transact in financial markets. This webinar will look at how tokenisation is emerging in asset management businesses.

Calastone released a white paper “Practically applying tokenisation in asset management” where they noted that tokenisation in asset management is no longer a future trend but a fast-emerging reality. The pace and scale of this change raises important questions for the industry.

Tokenisation – the conversion of an asset or pool of assets into entities that can be digitally held and traded via distributed ledger technology (DLT), aka blockchain – is far more than a technical shift. It is an opportunity to transform how the industry operates and serves its customers, making ideas such as mass personalisation and widespread access to alternative assets realistic.

We look forward to having you attend the webinar and, if you’re interested, register here.

ASIC request ASX clearing & settlement advisory board

ASIC has requested that ASX establish a high-level industry advisory group to support ASX’s CHESS replacement project. It is proposed that this group is independently chaired and will advise on significant strategic clearing and settlement issues relating to cash equities trading in Australian markets with a focus on CHESS replacement.

The proposed solution was discussed at an industry roundtable on 2 August 2023. The industry roundtable was chaired by ASIC Chair Joe Longo, who was joined by ASIC Commissioner Danielle Press and the Deputy Governor of the Reserve Bank of Australia, Michele Bullock. Attending the roundtable was a small group of recognised industry leaders.

ASIC’s initiative follows industry concerns over the adequacy of ASX’s stakeholder engagement and governance. This includes ongoing concern with ASX’s management of intragroup conflict of interests.

You can read the ASIC announcement here.

ACSA Thought Leadership Paper – Cyber best practice in investment communities

Economic environments and financial markets are increasingly subject to cyber-attacks and recent cases of information security breaches at Optus, Medibank and Latitude Financial have increased the focus on the data and information security. APRA’s CPS230 has reinforced the need for sound governance and control processes over data and information.

ACSA members provide critical data and information infrastructure to the investment and superannuation industries and have built world class control frameworks for supporting their clients and own data and information security needs.

ACSA is preparing a white paper on “Cyber best practices in investment communities” for ACSA members to share the essential components of effective cyber, data and information security frameworks that support Australian investment and superannuation communities.

If you would like to receive a copy of the white paper, please register here.

The white paper will be available in October.

Digital asset custody – Crypto licensing senate inquiry

ACSA recently attended the Australian Senate Economics Committee hearing into the Digital Assets (Market Regulation) Bill 2023. This was a private legislative Bill sponsored by Senator Andrew Bragg.

The Bill seeks to implement certain recommendations of the final report of the Senate Select Committee on Australia as a Technology and Financial Centre by: providing for a framework for digital asset exchanges, digital asset custody services and the issuing of stablecoins; requiring authorised deposit-taking institutions to comply with certain reporting requirements in relation to designated central bank digital currency; and providing for additional duties of the Parliamentary Joint Committee on Corporations and Financial Services in relation to the regulation of activities relating to digital assets and designated central bank digital currency. More information on the Bill can be found here.

ACSA recognises that crypto and other digital assets are emerging rapidly in Australia as both an asset class and a fungible “currency” that can change the nature of trading, settlement, transacting and safekeeping for traditional assets, new digital assets, and digital contracts. A key priority for ACSA is ensuring that future regulation allows for efficient and effective market operations that ensure adequate investor protection, particularly for institutional and wholesale investors. ACSA’s submission can be found here.

Global Insight – ISSA Corporate Governance Survey 2023

ISSA is supporting an industry-wide initiative entitled “Proxy voting & Class actions: Today’s ESG challenge”. This initiative is designed to collate detailed, statistical information on how and where organisations can support increased and improved shareholder engagement.

In cooperation with The ValueExchange, goal, FIS and Proxymity; ISSA have created a survey that offers a unique opportunity for you to benchmark your own strategy with your peers. By sharing your insights, you will help to shape a new set of industry benchmarks and you will also receive a customised scorecard for your personal use showing your results against those of your industry peers. The survey responses will also help ISSA to drive the evolving industry dialogue – with these results feeding directly into the work being undertaken by our ISSA Asset Servicing Working Group.

To participate in the survey, click here.

In Focus –Scott Hudson

Scott Hudson
General Manager – Market Liaison, Computershare Issuer Services
Scott has spent almost 24 years in capital markets and has been involved with ACSA for the last 13 years.

Scott began his career at NAB Custody in the unlisted investment team in 1999, spent 5 years in London working for Gartmore & HSBC on a range of hedge funds.

Scott has been at Computershare for almost 17 years where he has held a number of senior relationship roles across both listed company & unlisted funds. His current role as GM – Markets Liaison sees him being responsible for strategic relationships across the market place and includes brokers, custodians, fund managers, ASX as well as regulatory and political engagement.

Quick fire five
Coffee or Tea? Coffee before 12 only!
Tik Tock, Instagram or Facebook? Insta…also use LinkedIn quite a bit
Pop, Rock or Rap? All of it!
Cocktail or Wine? Wine, but nothing wrong with following a martini with a pinot noir….or a pinot with a martini.
Summer or Winter? Both, again….we are so lucky here in Australia to have beaches for summer and mountains for winter.

First of all congratulations on a very successful career, what have been your career highlights and what are you most proud of when you look back on your career?

I think it has to be the great relationships – friendships – I have made. Whether they are some of the people I began working with in 1999 at NAB, contacts from my 5 years in London or in my time at CPU since, it is a real pleasure to have been able to meet, work, deal, and be friends with so many awesome people.

How did you first begin working in financial services/asset servicing?

I finished uni at the end of ’99…and almost immediately began working NAB Custody. I remember the recruitment consultant saying it was in the ‘corporate actions’ team. What’s a corporate action I ask?? Whilst she wasn’t sure, she came back and said that it was the part of the bank that dealt with takeovers, capital raisings and voting at AGM’s….All I could picture at the time was this was going to be like Gordon Gekko in Wall Street! And how wrong that view was!

The position in NAB ended up being in the Unlisted Investment Team. I was the 4th onto that desk…there were 16 when I left 2 years later to head over seas to London. That first role taught me a hell of a lot…we saw massive growth in the value of managed funds being traded and held as many super funds moved away from individual fund manager mandates to pooled investment vehicles. This role at NAB was a great base to spring board for a 12 month working holiday in London…where I ended up working for HSBC and a large Hedge Fund Manager for 5 years.

Since coming home to ‘grow up’ Ive had a number of roles here at Computershare which has actually seen me be lucky enough to be an insider an many many deals though…some of which have even been as acrimonious as Gekko’s takeover of Teldar Paper!

You’ve been involved with ACSA in the past as a board member, tell us about that experience and the value ACSA brings to the industry.

One of the great aspects of ACSA involvement is being able to get a broad industry view of matters. Its very easy to get ‘stuck’ with your singular view of the world in any organisation. Forums and groups like ACSA really help to give everyone a better and broader understanding of the broader (and complex) eco system that the capital market place is. The other point is on change. Change in this industry is a constant….today is different from yesterday and tomorrow will be moreso. ACSA really helps people to understand the changes that are here today and coming tomorrow.

What advice would you give to the younger professionals the industry?

Lean In - Make connections, ask questions, share your thoughts.

And whilst your boss may hate me for saying it, go OS if you can. My Head of Opps back at NAB really encouraged this (and I think there were 6 of us who took his advice)….."And Huddo if it doesn’t work out, you can come straight back here.