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NAB’s Asset Servicing and DST Global Solutions Jointly Innovate HiPortfolio to Manage Taxation More Effectively for Clients

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Australia’s leading custodian, NAB Asset Servicing, a division of National Australia Bank (NAB), has successfully implemented DST Global Solutions Investment Management Solutions’ (IMS) HiPortfolio propagation functionality for Tax and Accounting. Jointly developed by NAB and DST Global Solutions IMS, the new administration enhancement will be used at a legal entity level for one of NAB’s largest superannuation fund clients in order to help optimise tax parcels and reduce the fund’s tax liability.

Ray Lester, general manager, delivery services and project sponsor at NAB, described the benefits of this first-to-market solution: “By working at the propagated level, tax parcels are chosen from a greater pool and can therefore be selected in a manner that produces a lower total capital gains tax figure. This enables us to maintain an advantageous tax position for our clients.

“Previously, sub-portfolios were created to allow investment decisions of a reporting entity to be delegated to their various investment managers. These were sub-sets of the total holding of the entity, and often individual managers would hold parcels of the same security as their counterparts.”

“Because of this segregation, parcel selection for capital gains tax was only able to be applied using the parcels available to each manager individually. Now, propagation will group the parcels of linked sub-portfolios and allow the tax allocation method to be applied to all parcels.

“The HiPortfolio solution is also designed to make reporting and account preparation considerably easier, more efficient and consistent, as all the data is consolidated at the outset. This approach is also expected to reduce risk in the process,” Lester outlined.

The implementation of the HiPortfolio Tax Parcel Optimisation is the culmination of a two-year software development project. NAB worked very closely with DST Global Solutions IMS in its implementation. With the first successful implementation of its kind in Australia, NAB anticipates having a unique advantage in the competitive custody market.

NAB is now looking to progressively roll-out the system across its entire client base as the potential tax savings through propagation for large superannuation funds are substantial.

“To remain as the de-facto standard for fund accounting solutions, HiPortfolio needs to be, and is obviously, adaptable,” said Ian Mathieson, chief executive officer for DST Global Solutions Australia and New Zealand.

“We were delighted to work with such a committed and innovative team at NAB on this groundbreaking project. This is another example of our successful development approach whereby NAB—and in time, its own client base—can potentially gain significant benefits through our continued long-term collaboration and development projects.”

NAB has had a long-time software development relationship with DST Global Solutions and is an active member of the company’s Advanced User Group (AUG) within Australia. The AUG plays a key role and has significant influence on the enhancements and evolution of HiPortfolio-related solutions in Australia

The HiPortfolio propagation functionality for Tax and Accounting solution was developed at DST Global Solutions’ Melbourne Research and Development Centre.

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