Custodial Service

Holding bonds in custody for our clients

FIIG's Custodial Service supports your direct investment in bonds across a range of investment sizes, starting from $10,000 per bond with a minimum portfolio balance of $50,000. This is carried out through safe keeping of your investments, settlements of purchases and sales, collection and processing of coupons and maturities on your behalf, and the provision of ongoing portfolio reporting, valuation and analysis.

With FIIG’s Custodial Service:

You can have full confidence in your fixed income holdings being securely held on your behalf.
- You retain beneficial ownership of the bonds held in your FIIG Custodial Account.
- A GS007 audit is performed by Grant Thornton Australia, usually on an annual basis, ensuring an independent review of FIIG’s Custodial Service. The GS007 audit report is made available to FIIG’s clients upon request.
- You have a choice of holding AUD or foreign currency bonds in your FIIG Custodial Account.
- FIIG is an incidental provider of custodial services, fully licensed to provide custodial services, and regulated by ASIC.

You’re kept completely informed. You have secure 24/7 online access to your portfolio information, detailing:
- Investments and holding valuations
- Investment income
- Investment transactions
- Credit ratings (wholesale clients only)
- Contract notes, coupons and maturity advice
- Online bond buy and sell requests

You also have access to portfolio tools and market data, to help you stay right on top of your investments and cash flow forecasting tools to help you plan and manage your expected future income.

You save time and money. FIIG administers corporate actions on your behalf, including processing coupons and investment maturities. In addition, your annual statement from us provides you and/or your accountant with information to assist in the completion of your tax return.

In addition, income and funds from maturing investments are paid into your nominated bank account generally within two days of the issuer paying the funds to FIIG.

Why do I need a custodian?

To buy bonds through FIIG you are required to have custody arrangements in place. FIIG offers it’s clients a custodial service. Or, you can make independent custody arrangements.

How does the FIIG Custodial Service work?

You open a custody account with FIIG
Assets are held in safe custody in FIIG’s DirectBonds Custody Account with the custodian bank (JPMorgan)
Coupons (interest payments) and maturities are paid to your bank account
Bonds are held until maturity or until you sell them
Ownership of your bonds remains with you (more on ownership below)

Ownership of your bonds

The beneficial ownership of your bonds, held in custody using FIIG’s Custodial Services, remains with you at all times. Your bonds can only be bought, sold, or otherwise dealt with in accordance with your instructions to FIIG. This means that your bonds are your assets at all times and do not form part of the assets of FIIG or the custodial bank. Therefore, if FIIG or the custodial bank were to cease operations, your bonds are safe and remain yours.

Custodial Service Graph

Frequently asked questions

What is a custodian and why do I need one?
Do I get a certificate to show that I own a bond?
What are your fees?

When you buy bonds in the over-the-counter (OTC) market, you are required to hold them in the safe keeping of a licensed custodian until they mature or you decide to sell them. CHESS, a company owned by the ASX, is one example of a custodial service provider for financial products such as shares, warrants and units in trusts. However, CHESS does not cater for OTC bonds. Licensed custodial service providers, such as FIIG, hold an electronic record of an investor’s beneficial ownership of a bond. They also provide a range of services including account administration, transaction settlements and reporting. FIIG is an incidental provider of custodial services, as we provide custodial services for the purpose of facilitating our other main services, which includes client trading of, and investment in bonds via our DirectBonds Service, or MIPS.

FIIG’s Custodial, Settlement, and Administration Services

FIIG’s Custodial, Settlement, and Administration Services includes:
• Holding and safekeeping your fixed-income assets
• Maintaining adequate records with respect to beneficial owners
• Notifying you of any event which may affect your assets (i.e. corporate actions, consent events)
• Transaction settlements
• Collection and processing of payments, including coupons and maturity payments
• Settlement in other currencies facilitated via our Foreign exchange service
• Account administration including the processing of contract notes and corporate actions
• Reporting, including monthly and annual statements

No you don’t. Your licensed custodian will keep an electronic record of your ownership of the bonds. When you invest with FIIG, we provide you with trade confirmations and monthly statements so you can always check what bonds you own. You can also see your holdings 24/7 via our secure website, MyFIIG, along with a range of additional reporting related to your holdings.

FIIG charges a Custody and Administration Fee as follows:

- 0.20% p.a. for the first $500,000
- 0.14% p.a. for the next $1.5m
- 0.09% p.a. for the next $3m
- 0.06% p.a. for amounts over $5m

The Custody and Administration Fee is subject to a minimum monthly fee of:

- $20 if you have nominated an existing Macquarie Bank CMA or elected to establish a new FIIG Funding Account held in your FIIG account name with Macquarie Bank; or
- $30 if you have not elected to have a Macquarie Bank CMA as your FIIG Funding Account. The Custody and Administration Fee is calculated daily on the value of your account holdings and charged monthly.

Please note that for accounts opened on or before 30 June 2015, the Custody and Administration Fee will be waived until 1 January 2016.