The custody industry will begin testing the new T+2 settlement regime in coming weeks ahead of the ASX's proposed start date of 7 March 2016, says the Australian Custodial Services Association (ACSA).
The members of ACSA are on track for the transition to T+2 settlement times, says David Knights, ACSA chair.
Market participants will begin testing their readiness for the new regime in October.
"Reducing settlement time from three days (T+3) to two days (T+2) for equity and debt markets will help financial investment in Australia to be more efficient and safer, and it will put the Australian market on the same standard of major global markets in terms of settlement time frame," Mr Knights said.
ACSA is working closely with the ASX to determine "operation impacts" of relevant corporate action events needed for the smooth implementation in March 2016, said a statement by the industry association.
"As well as ensuring readiness for T+2 settlement, ACSA is also working hard to manage the rapid growth of unlisted and alternative investments, with Mr Knights noting that there are now $2.5 trillion worth of assets under custody in Australia, compared to $1.6 trillion on the ASX," ACSA said.
"ACSA's members are looking after assets worth around 156 per cent more than the market value of the ASX. This growth in unlisted and alternative assets creates new challenges in terms of how we classify and hold assets such as syndicated loans, and we need to work with our stakeholders to ensure we safeguard them effectively," said Mr Knights.
"As a broader purpose for the coming financial year, ACSA, on behalf of its members, will focus on the ongoing regulatory reforms that are challenging the custodial sector, collaborating with regulators to achieve the best outcome for the Australian financial industry and the customers it serves."
One of Australia’s underdog neobanks has received hundreds of millions in funding from a global banking industry investor. ...
A major asset manager has shuttered its ETFs after they failed to attract investors. ...
ETFs have passed the “real-life test of extraordinary volatility” as markets tumbled amid the coronavirus rout. ...