RBC Dexia, which specialises in funds management outsourcing rather than servicing super funds, has had as its number one priority over the past year or so the bedding down of its new retail unit registry operation, which the firm sees as a big differentiator from other administrators.

RBC Dexia introduced its global registry platform, Shareholder Accounting & Registration Platform (SARA), as part of the take-out of the Goldman Sachs JB Were (GSJBW) backoffice from late 2006. The Dexia-built system was acquired through the formation of the global joint venture between RBC and Dexia a year earlier. Aberdeen Asset Management has subsequently been added to this and MacDonald says that deals are in train for more managers to come on line soon. “It’s been successfully implemented and now the only issue for us is managing the growth,” he says. “It’s a question of how many we can transition, which is a nice problem to have.”

The RBC Dexia registry centre, in Melbourne, is the first in Australia to adopt the new SWIFTnet system, which provides for greater straight through processing opportunities. MacDonald says the Australianisation of the SARA system is a good example of the benefits of the global joint venture for clients and also a good way of demonstrating the companies’ commitment to investor services in general and Australia in particular. “The joint venture was not about randomly increasing scale. It was about adding a greater footprint, new capabilities and new technologies,” he says.

Because they are generally part of large banks, custodians in Australia as elsewhere have for years been plagued by M&A activity. Only last year, Bank of New York merged with Mellon to create the world’s largest custodian. Two of the four domestic banks, Commonwealth and Westpac, have exited the field altogether. Often times, the M&A activity has been about divestment of non-core businesses on the one hand or greater scale allowing for cost reductions on the other.

State Street, which launched its Australian office in 1986 and, with it, master custody for this region, has caused its share of M&A activity over the years. As the largest client of Westpac it encouraged that bank to close its competing master custody business in the 1990s and then exited master custody for super funds itself, for a period, in a deal with Commonwealth several years later. State Street re-entered master custody for super funds last year. Westpac, meanwhile, finally exited domestic custody too, selling its book to HSBC in 2006.

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