Australian HiPortfolio® clients complete software enhancements to be the first to meet TOFA Legislation Requirements

Sydney - 14 September 2010

DST Global Solutions today confirmed the successful completion of phase one of its Taxation of Financial Arrangements (TOFA)-ready program throughout key client sites within Australia. The enhancements to its flagship investment administration management solution, HiPortfolio, were co-developed with the company’s Advanced User Group (AUG) community to prepare for the administration of the new legislation responsible for the commercial recognition of gains and losses. The initial TOFA-ready sites include members of this network of fund managers, third party administrators and custodians such as National Australia Bank, BNP Paribas Securities Services and J.P. Morgan Worldwide Securities Services Australia and New Zealand.

The TOFA legislation became mandatory effective 1 July 2010 and is a comprehensive approach to the taxation of all financial arrangements. Rules now exist to cover tax timing treatments, especially in the area of hedging. Via a mix of elected and default methods of taxation treatment, the legislation is designed to reduce tax distortions and enhance financial risk management.

The HiPortfolio solution underwent a multi-million dollar, end-to-end development project to enhance its flexibility and operational efficiencies when administering TOFA-eligible entities including instruments, portfolios, positions and tax lots.

For DST Global Solutions’ CEO, Tom Abraham, this project was the most complex undertaking to date sponsored by the HiPortfolio AUG in Australia. “Compliance with the TOFA deadlines was mandatory and many of the detailed requirements were not well established until the project’s late stages. Significantly the TOFA reporting deadlines were met and as a secondary benefit, our clients have realised improved flexibility and efficiencies in their administrative processes.

“The joint development work and improved testing practices with clients made this achievement possible. The early adopters who participated in the TOFA-ready project have also accomplished a competitive advantage that will serve them well in attracting new clients,” he concluded.

Ray Lester, General Manager Asset Servicing, National Australia Bank, commented, “Whilst the collaboration with AUG members has reduced the cost, timing and risk levels of the HiPortfolio TOFA enhancement project, NAB Asset Servicing has made an extensive investment in its own implementation. As a significant participant and long-term contributor to the AUG, we believe that our input has assisted in the production of a high quality industry solution. We were happy to be responsible for this significant level of contribution to ensure that our clients’ interests were properly considered and protected as the industry responded to legislative change.”
Mr Lester continued, “Our preparation for TOFA was extensive and this has paid off with our successful TOFA compliance results. We remained focused on data quality from the calculation engine component of the project right through to full implementation in the production environment with the associated reporting developed and fully tested successfully.”

For BNP Paribas Securities Services Head of Product Management, Daryl Crich, the outcome of the co-development TOFA project was also a success. “BNP Paribas Securities Services has worked in close collaboration with DST Global Solutions to put in place a TOFA compliant solution for our clients.

Our Tax and HiPortfolio specialists have been involved at every step of the project from inception through to delivery. We also conducted a rigorous testing regime and DST Global Solutions were very responsive at addressing areas specific to our sophisticated requirements and advanced configuration.

As an example, BNP Paribas Securities Services unique and integrated service for fund managers and their specific investment requirements is being supported under TOFA. This has been achieved through our close collaboration with DST Global Solutions,” he said.
Said Bradley Kelly, vice president Product and Strategy, J.P. Morgan Worldwide Securities Services Australia and New Zealand (J.P. Morgan), "After much hard work in close co-operation with DST Global Solutions, J.P. Morgan is pleased to say that we are TOFA-ready, and our superannuation, insurance and investment management clients will soon begin to receive the benefits of TOFA entry. Importantly, our clients can be confident that the calculations have been rigorously tested, and comforted by the continuity of service afforded in light of such a complex program of legislative change."

Developed in Australia at DST Global Solutions’ Investment Management Solutions Research and Development Centre, the HiPortfolio TOFA module is now available for implementation.

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