The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

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

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.

Related content

WEBINAR

Recorded Webinar: Adverse media screening – how to cut exposure to criminal activity, from money laundering to human trafficking

Screening for adverse media coverage of counterparties presents an incredible opportunity for financial institutions to limit risk exposures and identify bad actors early. It is required by regulations such as the EU’s sixth Anti-Money Laundering Directive (AML 6), and is one of the most effective ways to steer clear of potential connections with sanctioned activity...

BLOG

SETL Launches Verafide Digital Credentials Platform for KYC, Other Verification Challenges

Blockchain operator SETL’s Verafide subsidiary has launched its open-source platform for verifying digital credentials and identification on the SETL enterprise blockchain, allowing issuers, holders and verifiers to set up and maintain a digital credentials ecosystem. The Verafide platform is aimed at helping firms fulfill their KYC obligations, adopt more seamless and transparent customer onboarding processes...

EVENT

RegTech Summit APAC Virtual

RegTech Summit APAC will explore the current regulatory environment in Asia Pacific, the impact of COVID on the RegTech industry and the extent to which the pandemic has acted a catalyst for RegTech adoption in financial markets.

GUIDE

Entity Data Management Handbook – Seventh Edition

Sourcing entity data and ensuring efficient and effective entity data management is a challenge for many financial institutions as volumes of data rise, more regulations require entity data in reporting, and the fight again financial crime is escalated by bad actors using increasingly sophisticated techniques to attack processes and systems. That said, based on best...