Monday July 1 2013

News Source: Global Exchanges

Focus: Trading Systems and Technology

Type: General




ASIC has strengthened the financial requirements for custodial and depository service (custody) providers. The new rules also apply to asset holders for registered schemes or investor directed portfolio services (IDPS).

Custody providers and asset holders are key service providers in the financial services industry and play a significant role in the safekeeping of client assets. As at 31 December 2012, approximately $2.065 trillion of assets of Australian investors were held in custody. This figure is expected to more than triple over the next 15 years to $6.4 trillion.

Under the changes, custodians (not including incidental providers) and asset holders will be required to hold net tangible assets (NTA) amounting to the greater of:

  • $10 million, or
  • 10% of average revenue.

Providers who meet the definition of ‘incidental provider’ will be required to hold NTA amounting to the greater of:

  • $150,000, or
  • 10% of average revenue.

All custody providers and asset holders will be subject to new requirements regarding the preparation of cash flow projections and liquidity.

The new financial requirements will apply from 1 July 2013 for new licensees. For existing licensees, there will be a one year transition period and compliance will be required from 1 July 2014.

Click on the above link for more details