Two weeks after the implementation of new financial requirements for responsible entities ("REs"), ASIC has issued consultation paper 194: Financial Requirements for custodial or depository service providers ("CP194") which seeks industry comment on further changes proposed to be made to the financial requirements imposed on custodial and depository service providers.
CP 194 proposes the following changes:
Currently, the NTA requirement for custodian service providers and IDPS operators who hold IDPS property is $5m. The current NTA requirement for REs that hold scheme property is the greater of $5m or 10% of average revenue.
REs are required to maintain 12 month cash flow projections. Under the proposed changes, custodians and IDPS operators who hold IDPS property are also required to maintain 12 month cash flow projections under the proposed changes. Under the current system, these entities are able to rely on one of the 5 options for cash needs requirements i.e. 3 month cash flow projections.
Submissions are due on CP194 by 14 January 2013.
ASIC proposes the reforms to be effective for new providers from 1 July 2013 and for existing providers from 1 July 2014 following a 12 month transition period.
To download a copy of CP194 visit www.asic.gov.au or click here.