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- Global Custody Pro - 22 August 2025
Global Custody Pro - 22 August 2025
HKEX, Northern Trust, Basel Crypto Rule Pushback and more
Global Custody Pro
August 21, 2025 • Reading Time: 7 minutes
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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. Have feedback? Just reply to this email or connect with us on LinkedIn.
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🌏 Global Custody News
HKEX Posts Record Profit on Trading Surge
Source: HKEX
Hong Kong Exchanges and Clearing Limited reported its best-ever half-yearly results, with profit attributable to shareholders rising 39% to HK$8.5 billion in the six months ended 30 June 2025. Revenue and other income climbed 33% to HK$14.1 billion, driven by a doubling of average daily turnover in the cash market to HK$240.2 billion and record Stock Connect volumes.
The exchange benefited from optimism about China's economic outlook and supportive policies, which drove increased participation from both international and Mainland investors. IPO fundraising surged more than eightfold to HK$109.4 billion, with 44 new listings, including the largest global IPO since 2023. The derivatives market also reached new highs with an average daily volume of 1.7 million contracts.
Looking ahead, Chief Executive Bonnie Y Chan said the exchange enters the second half with strong momentum and new initiatives underway, including preparations for shorter settlement cycles and expansion of the paperless listing regime. The board declared an interim dividend of HK$6.00 per share, representing a 38% increase from the prior year.
Northern Trust Extends Morningstar Fund Services Deal
Northern Trust Corporation announced the extension of its comprehensive asset servicing relationship with Morningstar Investment Management, which will continue to support nine multi-managed registered mutual funds representing approximately $5 billion in assets under management. The company confirmed it will maintain its full suite of services, including global custody, fund accounting, fund administration, transfer agency, regulatory administration, credit and securities lending.
The relationship, which commenced in 2018, serves funds managed by Morningstar Investment Management, an affiliate of global investing insights firm Morningstar that manages $352 billion in total assets. Morningstar Investment Management collaborates with advisers to offer investment strategies, including model portfolios and separately managed accounts, across various investment approaches.
Ryan Burns, Head of Global Fund Services, Americas at Northern Trust, emphasised the shared commitment to high service standards and consultative approaches between the two firms. The renewed mandate positions Northern Trust to continue supporting evolving client needs in the registered fund space, whilst leveraging its comprehensive end-to-end services capabilities developed over its 135-year history.
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🚀 Digital Asset News
Banks Seek Basel Crypto Rules Pause
Nine global financial associations have requested the Basel Committee on Banking Supervision temporarily pause implementation of its cryptoasset exposure standards scheduled for 2026, according to an August 19 letter. The associations argue that the framework requires a fundamental redesign to reflect market developments since its adoption in 2022.
The associations, including the Global Financial Markets Association and Institute of International Finance, produced a report stating that distributed ledger technology use cases have "greatly expanded" beyond the premises underlying the current standard. The filing disclosed that tokenised versions of traditional assets are being developed with official sector coordination, including through Bank for International Settlements Innovation Hub projects.
The groups proposed six specific revisions in their filing, including eliminating distinctions between permissioned and permissionless ledgers, recognising regulated stablecoins as eligible collateral, and recalibrating risk weights. According to the document, the associations warned that the framework's capital charges (including a potential 1,250% risk weight for certain assets) would continue driving crypto market development outside the regulated banking sector.
Crypto Groups Oppose Bank-Backed GENIUS Act Changes
The Crypto Council for Innovation and Blockchain Association sent a letter to Senate Banking Committee leadership opposing August 12 recommendations from banking trade groups seeking to modify the GENIUS Act, which has already been signed into law. The crypto organisations argued that the proposed changes would protect banks at the expense of competition and consumer choice in the stablecoin market.
The letter disputed banking industry claims about potential deposit outflows, citing a July 2025 Charles River Associates analysis commissioned by Coinbase that found no significant correlation between stablecoin adoption and community bank deposit losses. The organisations noted that stablecoin reserves largely remain within the traditional financial system through commercial bank accounts or Treasury holdings. They also highlighted that average checking account yields hover at 0.07% while the Federal Reserve's target rate stands at 4.25%-4.50%, arguing that third-party reward programs help consumers combat inflation losses.
The crypto groups defended Section 16(d) of the GENIUS Act, which allows state-chartered institution subsidiaries to conduct cross-state money transmission for stablecoin activities, warning that its repeal would create a "fragmented, balkanized regulatory regime." They concluded that altering the enacted provisions would "fundamentally weaken a legislative framework designed to encourage competition and democratize the benefits of technological advancement in digital finance."
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