An agenda to reform Australia’s investment administration infrastructure in order to keep pace with global regulatory changes and industry standards was launched by the Australian Custodial Services Association (ACSA) at the 2008 Investment Administration Conference held at the Darling Harbour Convention Centre last month.

Bryan Gray, ACSA chair, said the domestic custody and investment administration sector needed to undertake infrastructure, regulatory and tax reform to enhance the Australian industry’s competitiveness across global markets. Gray said the administration systems underpinning the Australian market were too reliant on “old-fashioned” fax and manual processing methods and needed to become more sophisticated in order to support the growth of funds, the complexity of investment instruments and strategies, and engagement with global markets.

“If we could improve the efficiency of our underlying financial infrastructure – as well as abolish some unappealing taxes – Australian companies and investment funds would attract a lot more investors from offshore,” he said.

Pivotal agenda concerns for 2008 include:

• Working with the Australian Stock Exchange to address mismatching occurring among trades in the clearing house electronic subregister system (CHESS) between non-broker participants;

• Abolishing the foreign tax credit rules (effective 1 July 2008) and the taxation of financial arrangements (effective 1 July 2009);

• Setting a consistent practice for custodians to accommodate new withholding tax measures; and

• Improving the proxy voting system, communication processes with share registries and the accelerated rights issue process.

In addition, during 2008 ACSA will introduce an associate membership category that would allow other backoffice service providers, such as superannuation fund member administrators and software providers, to join the association.

Leave a comment