Assets under custody in Australia rise by 2% in June half in subdued market conditions
David Travers
Data released by the Australian Custodial Services Association (ACSA), the peak industry body for custodians and asset service providers in Australia, revealed a 2.1% rise in assets under custody to $4.4 trillion in the six months to 30 June 2023.
Source: Australian Custodial Services Association, full breakdown available at https://acsa.com.au/page/IndustryStatistics
During a period of volatility in local and global markets, assets under custody in June 2023 have rebounded to levels consistent with the prior quarter. Individual custodians experienced different performance outcomes throughout the year due to increased custody asset movements within the industry (Full details can be found in the statistics on ACSA’s website).
According to the latest ACSA data, Australian investors increased their allocation to overseas assets during the period by 9.7% to $1.5 trillion, and Australian-domiciled investments decreased by 1.5% to $2.9 trillion. Assets held in Australia on behalf of offshore investors (sub-custody assets) increased by 6.1% to $1.9 trillion.
Asset servicing providers in Australia had $5.2 trillion in assets under administration as at June 2023, up by 0.9% from $5.1 trillion, and settled 12 million trades in the six months to 30 June 2023, three per cent fewer than the previous six months. ACSA members on average settled approximately 91,600 trades per day on behalf of clients.
ACSA Chief Executive Officer David Travers said that the past six months had been fast-paced, driven by a significant amount of market and regulatory change.
“Macro local and global economic factors have led to surprising stability in the asset levels reported by ACSA, with relatively small changes in assets under custody and assets under administration on lower transaction volumes. The increase in assets allocated to non-Australian assets indicates that investors are clearly seeking to take advantage of offshore conditions,” Mr Travers said.
“Looking ahead, ACSA members will continue to focus on their response to regulatory change, their evolving role in supporting institutional involvement in digital assets, including cryptocurrencies, and ongoing support for the ASX on CHESS and its replacement program,” he added.
“Innovation, digital asset evolution, and standards remain a critical focus for achieving efficiency in custody and investment administration. ACSA remains well placed to address the opportunities and challenges in the coming year through a combination of our working groups and task forces.”
ACSA has changed its reporting from a breakdown of ACSA members’ static asset under custody data to industry-level trends on Australian assets under custody, sub-custody assets for foreign investors and assets under administration.
