In this issue

• ACSA Board change
  
• T+1 in Australia – ACSA’s response
  
• ACSA issues CPS230 Operational Risk Guidance Note
  
• ACSA Graduates - Elevating Women’s Voices
  
• ACSA Thought Leadership Series
  
• ACSA at IBR Investment Operations conference
  
• Global Perspective – ISSA How DLT is being utilised
  
• In Focus – Andrew Gibson (Citi)
  

Introduction

In this edition of the ACSA Industry Wrap we will update you on ACSA’s guidance on CPS230 and our response to T+1 for Australia. ACSA is also celebrating the graduates of the Elevating Women’s Voices Program, a program run in partnership with AIMA and 100 Women In Finance.

This issue also highlights an ACSA Board change, our presence at an upcoming industry conference, and what’s next in the ACSA Thought Leadership Series. We also share some interesting content on how Distributed Ledger Technology is being used today.

We are In Focus with Andrew Gibson from Citi.

ACSA Board Changes

After 7½ years on the ACSA Board, Andrew Gibson, – Custody Country Product Head for Australia & New Zealand at Citi is stepping down and will be replaced byChris Moore, Head of Client Management, Australia and New Zealand at Citi.

During his tenure, , Andrew played a role as Executive Sponsor on the ACSA Operations Working Group and provided leadership as ACSA’s representative on the ASX Business Committee.
Andrew was instrumental in driving the industry’s contribution to the discussions on CHESS Replacement, T+1 and demonstrating leadership on other efficiencies and best practice areas such as proxy voting and managed funds.

Chris will replace Andrew as Citi’s Board representative and will sponsor the ACSA Operations Working Group at board level.

Sally Surgeon, ACSA Chair noted “Andrew has made a significant contribution to the Custody industry and ACSA over the last 7 ½ years. We thank Andrew for his service and wish him all the best for his next adventure. We also look forward to engaging with Chris as Citi’s new representative on the ACSA Board”.

The ACSA board looks forward to working with Chris and leveraging his knowledge in operational and market efficiency.

You can read more about Andrew below in this month’s In Focus section.

ACSA issues CPS230 Operational Risk Guidance Note – Critical Operations for ACSA Members and clients.

APRA released the final CPS 230 Operational Risk Management Prudential Standard in July 2023 and the accompanying Prudential Practice Guide in June 2024. The Prudential Standard is effective from 1 July 2025 and introduces substantial changes to the way APRA-regulated entities are to oversee and manage arrangements with services providers, including Custodians.

The impact of CPS 230 on ACSA members, as material service providers to many APRA-regulated clients, will be significant.

ACSA established a CPS 230 Working Group to collaboratively review the implications of this Prudential Standard and develop a Critical Operations guidance note for ACSA’s members and its clients. ACSA has engaged across the Superannuation and Investment industries in developing the guidance. ACSA expects to issue further guidance as the industry response to the APRA Prudential Practice Guide is understood.

Whilst this guidance focuses on Critical Operations, ACSA continues to engage on additional parts of the CPS 230 Operational Risk Management Prudential Standard where ACSA members and their clients may benefit from further industry guidance.

The ACSA CPS230 Operational Risk Guidance note – Critical Operations, is available on the ACSA website and can be accessed here.

T+1 in Australia –ACSA's response

Australia

ACSA has responded to the ASX industry whitepaper - Considerations for accelerating cash equities settlement in Australia to T+1. Also, since December 2023, ACSA members have participated in and contributed to the ASX industry wide T+1 working group to provide strategic considerations for a potential transition to T+1 for Australia and provide analysis and insights to the Business Committee on settlement cycle compression.

ACSA’s response to the ASX’s consultation expanded on ACSA’s T+1 position paper which was published in March 2024. ACSA does not oppose a move to T+1 settlement in Australia. This move, with its anticipated benefits and challenges, represents a significant evolution in the industry.

In its submission, ACSA noted the key benefits of T+1 settlement including a reduction in counterparty risk, enhanced efficiency, real-time communication, standardisation of timing standards, liquidity and funding benefits, and operational model optimisation. ACSA also sees any transition as an opportunity for Australia to align its market practices with global standards and engage in comprehensive re-engineering of market practices.

There are challenges, such as potential initial increases in fail rates, liquidity costs, extended operating hours, implementation costs, regulatory framework adjustments, and potential unintended consequences.

ACSA encourages learning from other international transitions and global markets moving away from T+2 settlement, particularly the moves in the US and Canada. collaboration across the value chain, training and education, a global support model, and leveraging data analytics will be key for a successful transition.

There is a need to balance T+1 discussions against key market infrastructure upgrades. The new "CHESS" replacement is expected to incorporate T+1 readiness, ensuring a seamless integration of the settlement cycle with market infrastructure upgrades.

ACSA members noted that resourcing multiple significant projects like CHESS Replacement and T+1 settlement could create pressure on market experts . Both initiatives have large impacts, and the same set of market experts would be best placed to work on both, however doing both simultaneously introduces risk to the market through the amount of change taking place in a relatively short time. Proper planning, investment, and coordination among market participants and with the CHESS replacement project will be crucial to ensuring a successful shift to T+1 settlement.

Should this consultation with market participants conclude for Australia to move to T+1, ACSA’s expectation is a seamless transition which emphasises collaboration, technological readiness, and strategic planning to navigate the complexities of this transformative journey in the global financial landscape.

You can see the full ACSA response to the ASX industry whitepaper, considerations for accelerating cash equities settlement in Australia to T+1 here.

ACSA Graduates - Elevating Women’s Voices 2024 Program

Congratulations to the 18 sponsored graduates of the 3rd Elevating Women’s Voices program.

ACSA partnered with the Alternative Investment Managers Association (AIMA) and 100 Women in Finance (100WIF) to foster and build on the contribution of women to the financial services industry.

Sally Surgeon, ACSA Chair commented that “I participated in the Elevating Women’s Voices Program as a mentor, the content and format was motivating and the development that participants received over the eight weeks of the program was incredible. The combination of the in-person training sessions and follow-up small group mentoring meetings was very effective for learning new skills and building confidence. I witnessed a transformation in so many program participants, who before attending the program would never have volunteered for a public speaking opportunity. By the final event they were presenting in front of over 100 people as if they had been doing so for years.”

Elevating Women’s Voices Program was created by AIMA and 100WIFto ensure women across the financial services industry and the broader communities are equally represented. Womens’ expertise, talent, perspectives, voices, stories and contributions equally drive the thinking, planning and future of our industry.

The Elevating Women’s Voices Program is designed to:

• Provide support, guidance, confidence and opportunities to enable our highly competent and capable women to speak to, and on behalf of, the financial services industry and the companies they represent.
  
• Provide the Australian business community with a wealth of female voices, opinions, and approaches to creating, managing, and transforming industry conventions.
  
• Encourage more active participation in the Financial Services Industry and provide more opportunities to do so.

To find out more about the program and participate in 2025, ACSA will be promoting the event through ongoing newsletters and events. Keep an eye out for registration for the 2025 program early next year.

ACSA Thought Leadership Webinar Series

We finished June with an ACSA Thought Leadership Series pre year-end tax webinar to provide an important update from industry tax leaders on regulatory change, emerging trends, and potential implications for ACSA member companies and their clients.

The panel which included Duncan Lyon (JP Morgan), Fergus Walshe (BNP Paribas), Philip Barlin (Northern Trust) and Nicole Ma (JP Morgan), who shared insights into:

• Key tax matters
  
• Third party tax governance
  
• Tax treatments – Burtons, and
  
• Certificates of residency
  

If you missed the webinar, it is available on the ACSA website, here.

What’s next?
The ACSA Thought Leadership Series is allowing ACSA members to focus on their year-end activities for their clients. Keep a watch out for the ACSA Thought Leadership Series to restart in August with current topics being developed including:

• Trends in global asset management
  
• Operational Resilience and CPS 230
  
• Updates on T+1
  
• Unlisted and private assets, and
  
• Evolutions in digital and crypto assets
  

ACSA at IBR Investment Operations Conference

ACSA and ACSA members will be hosting several presentations and panels at the IBR Investment Operations Conference being held in Sydney on 11-12 September, 2024.

This annual forum is focused on investment operations for both large and small organisations and provides an ideal introduction for those new to investment operations as well as providing the opportunity for experienced participants to hear from and network with their peers. The speakers represent industry experts, several of which are ACSA members, who will share their experiences insights with the delegates.

ACSA members will be involved in the following sessions at the conference:

To find out more about the conference you can access the full details here, or if you interested in joining a panel please contact admin@acsa.com.au.

Global Perspective – How DLT is being utilised

ISSA recently published the results its fifth “DLT in the Real World” industry wide survey, which was supported by Accenture, Broadridge and Ripple, and as last year, managed by the ValueExchange.

The survey delivers further insights of over 350 financial services organisations across the globe and provides unique industry benchmarks around how we are planning, progressing and realising our DLT ambitions in the real world. It provides unique and actionable insights on how DLT is being used across the world and gives learnings from customers and peers where DLT is solving real world problems, where it is not and how people are making the most of this technology.

This is the fifth iteration of the survey and so this allows insights into changes over time and it shows the evolution of our industry and of DLT.

Access the full survey here.

In Focus –Andrew Gibson

Andrew joined Citi in 2004 as the Head of Corporate Actions for Australia and New Zealand, before moving to the role of a Product Manager in August 2007. In 2014 Andrew was appointed to the role of Custody Country Product Head for Australia & New Zealand. Prior to joining Citi, Andrew spent 18 years with National Custody Services (NCS), where he performed a product development / business analyst role and a variety of operational roles, culminating in 3 years as the Head of Corporate Actions.

Andrew has been a long term active participant in industry working groups and was recognised for his contribution to the custody and investment administration sector with an Australian Custodian Services Association (ACSA) industry award in 2010.

Andrew holds a Bachelor of Business (Accounting) from RMIT University Melbourne and a Certificate in Financial Markets (Securities Institute of Australia).

Quick fire five

Coffee or Tea? Tea (English Breakfast)
Tik Tock, Instagram or Facebook? Facebook (although I use SnapChat more to keep in touch with the kids).
Pop, Rock or Rap? Rock
Cocktail or Wine? Cocktail (this has just recently taken over from wine after a few happy hour sessions in Koh Samui).
Summer or Winter? Summer

Can you provide your background and experience?
I started working in Custody in the late 1980s at National Custodian Services (NCS) in a variety of operational roles (predominantly corporate actions). In my time at NCS I was also fortunate enough to work as a business analyst on several projects, including the original CHESS project, the implementation of the NCS Custody system (STAR2000), the migration to SWIFT 15022 and the Y2K project. I joined Citi in the role of Head of Corporate Actions in 2004, moved to a Custody Product Management role in late 2007 and became the Custody Country Product Head in 2014 and I’ve been in this role for the last 10 years.

What are some of the exciting places your career has taken you?
Some of the exciting places that I have been fortunate enough to travel to include Boston, New York and Hong Kong. I enjoy getting to a sporting event if I can when travelling for work and I have been to the ice hockey in Boston and the baseball in New York. Not so much sport in Hong Kong but they have some great karaoke bars.

What has been your experience with ACSA?
My first involvement was back in the late 1990s, when I was working in Corporate Actions. The working group meetings weren’t as frequent or structured but served the purpose of getting together and identifying that many of we were facing many of the same challenges was a great starting point. Soon we had the registries and the ASX joining meetings and we started to make progress on issues. After a short break I re-joined the working groups in 2004 and have been predominantly involved in the operational working groups in some form since this time. I joined the ACSA Board at the end of 2016.

What is the most satisfying part of participating in ACSA?
Working with motivated people that are prepared to invest their own time to make a difference. Some of the initiatives to make change are hard slogs (proxy reform comes to mind), however when you get a result there is a sense of achievement that comes with that. It’s also satisfying meeting people from other organisations that understand what you do and can relate, unlike those people that you meet at a BBQ and you try to explain what custody is. Yes, they nod but you know that they don’t really understand.

What’s excites you about the future of our Industry and ACSA?
We continue to see innovation in the industry with new technologies having various levels of impact. Of these I think that Artificial Intelligence (AI) creates the most exciting opportunity for the industry to further streamline processes and generate efficiencies.
The only constant is that the environment is always changing particularly in the areas of regulation and market infrastructure. There are certainly some important and exciting industry changes on the horizon with CHESS Replacement, T+1 and CPS230 so ACSA continues to have an important role to play in shaping the future of the custody industry.

What advice would you give your 21-year-old self?
Not all moves have to be upwards and it’s ok to take a sidewards move to learn other parts of the business. Participating in project work provides scope to learn other areas of the business so see these as opportunities. Of course, participating in ACSA working groups provides similar opportunities with the benefit of industry networking. Whilst there are limited opportunities to do so, working overseas provides accelerated learning and personal development (and generally a lower tax rate). Compounding investment returns are powerful and the earlier you start the earlier the compounding begins (note, I’m not qualified to give investment advice).