Global Custody Pro - 14 November 2025

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Welcome to Global Custody Pro, read by custody professionals like you. I'm Brennan McDonald, Managing Editor. I write about the global custody industry, having spent over 12 years in financial services, including working at a global custody bank. An AI voice reads the audio version of this newsletter. Reply to this email with feedback or connect with us on LinkedIn.

Table of Contents

• 🌏 Global Custody News

  • HKEX invests HK$455M in CMU OmniClear

  • FMIs Show Business Risk Management Variations

• 🚀 Digital Asset News

  • Tokenisation remains small-scale despite regulator …

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🌏 Global Custody News

HKEX invests HK$455M in CMU OmniClear

Hong Kong Exchanges and Clearing Limited will invest up to HK$455 million to acquire a 20% stake in CMU OmniClear Holdings Limited, the company announced on 12 November 2025. The Exchange Fund managed by the Hong Kong Monetary Authority will hold the remaining 80% of CMU OmniClear Holdings, which was established in October 2025. A signing ceremony was held today to formalise the strategic partnership.

The partnership follows a Memorandum of Understanding signed between CMU OmniClear and HKEX in March 2025. CMU OmniClear operates the Central Moneymarkets Unit, the central securities depository for debt securities, whilst HKEX operates the CSD platform for equities in Hong Kong. Together, the entities offer access to securities in Hong Kong and the Chinese Mainland through Stock and Bond Connect links, with combined assets under custody exceeding US$5.1 trillion. By the end of September 2025, assets under custody of CMU stood at around HK$5 trillion equivalent.

The partnership will support the continued commercialisation of CMU and business development initiatives including expansion of investor CSD services, asset class coverage and collateral management services. The stated goal is to transform CMU into a competitive, multi-asset class platform and enhance cross-asset class efficiency in Hong Kong, facilitating efficient investment flows between the Chinese Mainland, Hong Kong and international markets.

FMIs Show Business Risk Management Variations

A November 2025 assessment by CPMI-IOSCO identified variations in how 34 financial market infrastructures implement general business risk management standards, with the peer review noting seven areas where some FMIs' practices differed from PFMI Principle 15 expectations. The assessment found some FMIs determine capital requirements primarily through a six-month expense calculation without incorporating broader risk profile considerations or resources needed for recovery and wind-down scenarios.

The Level 3 review revealed differences in how FMIs across 27 jurisdictions approach LNAFE requirements and recovery planning. According to the report, some infrastructures include resources allocated for other risks in their business risk calculations, while others have not established board-approved plans for raising additional equity in stress scenarios. The assessment also noted variations in identification of business risk categories, with some FMIs not including certain legal, operational, custody, or investment risks in their frameworks.

The report indicates authorities are expected to work with FMIs to address the identified areas. The assessment, based on surveys conducted in August 2023 with follow-ups through June 2024, examined payment systems, central counterparties, securities settlement systems, and trade repositories, excluding central-bank operated infrastructures. The findings reflect variations in business risk management practices across the global FMI sector.

PFMI PQD Database Update

Our proprietary database of PFMI public quantitative disclosures has reached 46 FMIs of coverage with select historic data available. We have also built our own analytics and calculated measures to enable richer comparison between different FMIs globally. If this is something you’re interested in, message [email protected] to discuss further.

🚀 Digital Asset News

Tokenisation remains small-scale despite regulatory support

IOSCO concluded that tokenisation of financial assets remains in early stages despite growing adoption, with existing regulatory frameworks generally adequate but new risks emerging. The international securities regulator's Fintech Task Force found that whilst tokenisation does not alter the economic substance of assets, it introduces operational, technological and legal uncertainties that require regulatory attention.

The report shows adoption concentrated in fixed-income products and tokenised money market funds, with firms including BlackRock, Franklin, Spiko and Ondo launching tokenised products. However, most tokenised bonds continue trading on traditional exchanges with thin liquidity on distributed ledger technology-native venues. IOSCO noted that atomic settlement capabilities remain under-utilised due to pre-funding burdens and operational unfamiliarity, whilst hybrid custody models requiring reconciliation between on-chain and off-chain registers limit efficiency gains.

Regulators across jurisdictions including Germany, Italy, Switzerland, Spain and Japan have adopted technology-neutral approaches, applying existing securities frameworks whilst establishing sandboxes and specific legislation where needed. IOSCO identified cross-chain interoperability, availability of wholesale central bank digital currencies or tokenised deposits, and managing cyber risks as critical challenges ahead, particularly as tokenised money market funds increasingly serve as collateral in cryptocurrency markets.

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