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- Global Custody Pro - 26 September 2025
Global Custody Pro - 26 September 2025
RBA, ASX, BNP Paribas, Proxymity, JP Morgan report and more
Global Custody Pro
September 25, 2025 • Reading Time: 7 minutes
📰 Welcome to the Newsletter
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
RBA Still Unhappy With ASX For Standards Compliance
The Reserve Bank of Australia downgraded compliance ratings for several Financial Stability Standards in its annual assessment of ASX clearing and settlement facilities. According to the assessment, both ASX Clear and ASX Clear (Futures) were downgraded to "partly observed" for the Credit Risk Standard after ASX reported in October 2024 that it had erroneously omitted implied volatility data from stress test calculations.
The assessment also downgraded ASX Settlement to "partly observed" for the Settlement Finality Standard following the December 2024 CHESS incident when the facility did not complete settlement on the value date. Austraclear was downgraded to "broadly observed" for the same standard. The Collateral Standard rating for both central counterparties was reduced to "broadly observed" after a review identified shortcomings in data controls.
All ASX facilities were upgraded to "observed" for the General Business Risk Standard after the group developed a wind-down plan outlining key strategies and implementation measures. The RBA has required ASX to identify necessary improvements to its model validation and control testing frameworks by March 2026, with an independent review to follow implementation.
BNP Paribas partners with Proxymity for proxy voting
BNP Paribas' Securities Services business has implemented Proxymity's digital proxy voting solution for its local custody general meetings services in the UK, Australia and New Zealand. The partnership delivers an end-to-end general meetings service enabling more efficient investor communications with accurate, real-time information.
The Vote Connect Total solution integrates with BNP Paribas' NeoLink client platform, allowing clients seamless access to information throughout the general meeting lifecycle. Clients can vote directly on the platform, through SWIFT in the latest ISO standard messages, or via their proxy provider, with votes transmitted to issuers immediately. BNP Paribas Securities Services, which holds USD 17.5 trillion in assets under custody as of 30 June 2025, maintains dedicated teams to handle client enquiries and coordinate operational flows with Proxymity.
The implementation represents BNP Paribas' continued investment in technology partnerships to enhance client services. Proxymity, which serves over 25 markets worldwide and counts seven of the world's top 10 global custodians as clients, has received recognition including FSTech's "Most Disruptive Technology in the FinTech Sector" award.
European Settlement Model Faces Transformation
European banks and broker-dealers are facing EUR 37 million in annual settlement inefficiencies under the current fragmented post-trade model, according to a report by The ValueExchange and Clearstream. The analysis reveals that maintaining collateral across multiple European markets with separate funding buffers, relying on intraday credit lines, and poor risk-weighted asset treatment are creating significant but often unperceived costs for treasury and trading operations.
The report notes that Basel III requirements have turned previously uncommitted credit facilities into concrete balance sheet costs, while improved cost visibility has made these inefficiencies harder to ignore. With 43% more banks investing in cost transparency over the past three years and T+1 settlement removing 83% of processing time, the pressure for transformation is intensifying. Index rebalancing events requiring EUR 5 billion in funding for Tier 1 investors are creating additional concentration risks.
The proposed Pan-European CSD Solution, already processing over 50% of T2S settlement volume across 19 markets, promises to deliver these efficiencies through asset consolidation, single connectivity, and direct access to central bank infrastructure. The report emphasises that implementation requires treasury and trading front office leadership rather than traditional operations-led change, with firms able to transition gradually by market and activity type.
J.P. Morgan has released its September 2025 Custody Industry and Regulatory Developments Report, providing comprehensive analysis of transformational changes across global post-trade infrastructure. The report, introduced by Alex Dockx, Executive Director and Head of Custody Industry Development, examines how custodians must adapt to accelerated settlement cycles, modernised asset servicing platforms, and evolving digital asset frameworks simultaneously.
The extensive report covers settlement acceleration across 20+ markets, with detailed timelines for Europe's October 2027 T+1 transition and Latin America's varied approaches through 2028. It analyses major infrastructure upgrades including DTCC's multi-year clearing modernisation, Euroclear UK's CREST transformation, and ASX's CHESS replacement system scheduled for 2029. The document also tracks withholding tax initiatives like Germany's delayed MikaDiv reporting and the EU's FASTER directive requiring harmonised relief procedures by 2030.
Beyond operational changes, the report highlights J.P. Morgan's advocacy role in shaping regulations from the US digital assets framework to the EU's Savings and Investment Union. The firm engages through trade associations, advisory boards and working groups to influence initiatives ranging from Saudi Arabia's omnibus account structures to India's FPI disclosure requirements, demonstrating how global custodians actively participate in regulatory development rather than merely adapting to changes.
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🚀 Digital Asset News
EFAMA Pushes DLT Reform for EU Markets
The European Fund and Asset Management Association (EFAMA) published two policy papers calling for sweeping reforms to the EU's digital assets framework, arguing that distributed ledger technology could address longstanding barriers to capital markets integration including fragmented post-trade infrastructures and cross-border flow restrictions. The association proposed expanding the DLT Pilot Regime into a permanent framework with higher thresholds and broader asset eligibility.
The proposals advocate for a "multipolar DLT payment ecosystem" allowing multiple settlement options including wholesale central bank digital currency, tokenised deposits, and MiCA-regulated stablecoins. EFAMA specifically requested clarification to enable UCITS funds to invest in and hold e-money tokens as both payment instruments and investments, while suggesting amendments to remove restrictions that discriminate against tokenised assets compared to traditional securities.
The association emphasised urgency given regulatory developments in other jurisdictions and warned that incremental changes would fail to encourage necessary market investments. EFAMA called for unbundling CSD services to increase competition and lower transaction costs, ultimately benefiting end-investors through improved market efficiency and reduced fees.
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