Another record as assets under custody surge to $4.7 trillion

David Travers

The Australian Custodial Services Association (ACSA), the peak industry body for custodians and asset service providers in Australia has released industry data showing assets under custody increased by 5.8 per cent to a new record of $4.7 trillion in the six months to 31 December 2021.

ACSA Chief Executive, David Travers, said the record result occurred on the back of strong financial markets in the December half and reflected confidence in the key services provided by the securities services industry.

“Our members reported a consistent increase for Australian and offshore assets for Australian investors of 6.1 per cent and 5.4 per cent respectively, compared to an increase of only 0.4 per cent for assets held onshore for foreign investors,” Mr Travers said.

“While part of this differential is the result of currency valuation changes and buoyancy in traded securities markets, it can also be traced to the long-term trend of institutional investors repositioning portfolios so as to seek balanced returns. There was also onboarding of new custody mandates on the part of some members evident in the relative movements during the half,” he said.

The statistics showed that asset servicing providers settled over 13 million trades during the six months to 31 December 2021. This equates to approximately 101,000 settled trades per day on behalf of clients.

“Innovation, leveraging the right technology partnerships and an ongoing focus on standards has been key to achieving efficiency in custody and investment administration,” Mr Travers said.

“Looking ahead to 2022, we expect our members’ focus will centre on the response to changing regulatory data reporting requirements, the evolving role of custodians in supporting institutional involvement in digital assets including cryptocurrencies, and the implementation of the ASX’s DLT-based replacement for CHESS. ACSA remains well placed to address the opportunities and challenges in the coming year through a combination of our working groups and task forces,” continued Mr Travers.