Custodial Service

Holding bonds in custody for your 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 $250,000. This is carried out through safe keeping of their investments, settlements of purchases and sales, collection and processing of coupons and maturities on their behalf, and the provision of ongoing portfolio reporting, valuation and analysis.

With FIIG’s Custodial Service:

  • Investors can have full confidence in their fixed income holdings being securely held on their behalf
    • They retain beneficial ownership of the bonds held in their FIIG Custodial Account
    • A GS007 audit is performed by PricewaterhouseCoopers 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
    • They have a choice of holding AUD or foreign currency bonds in their FIIG Custodial Account
    • FIIG is licenced to provide custodial services and regulated by ASIC
  • Investors are kept completely informed. They have secure 24/7 online access to their 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
  • Investors also have access to portfolio tools and market data, to help them stay right on top of their investments and cash flow forecasting tools to help them plan and manage their expected future income.
  • Save time and money. FIIG administers corporate actions on investors behalf, including processing coupons and investment maturities. In addition, their annual statement from us provides information to assist in the completion of their tax return.

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

Why do they need a custodian?

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

How does the FIIG Custodial Service work

  • Your clients 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 their bank account
  • Bonds are held until maturity or until they sell them
  • Ownership of their bonds remains with them (more on ownership below)

Ownership of their bonds

The beneficial ownership of their bonds, held in custody using FIIG’s Custodial Services, remains with them at all times. Their bonds can only be bought, sold, or otherwise dealt with in accordance with their instructions to FIIG. This means that their bonds are their 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, their bonds are safe and remain theirs.

How does the FIIG Custodial Service work

Frequently asked questions

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 hold an electronic record of an investor’s beneficial ownership of a bond. In addition, custodial service providers may also provide a variety of related services including:

• account administration;
• transaction settlements;
• collection of payments; foreign exchange; and
• reporting.

FIIG is authorised pursuant to its Australian Financial Services Licence issued by ASIC to provide custodial services for its clients.

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 the following custody service fee

- 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 Service 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 Service 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 Service Fee will be waived until 1 January 2016.

For more information on our Custodial Service

Custodial services factsheet PDF download

Download the Custodial Service brochure

Get the brochure

Talk to an expert

Jacqueline OConnor - Head of Short Term Money Markets d.bruce John Sheridan - Head of Private Clients NSW/ACT Kieran Quaine - ‎Head of Managed Income Portfolio Services (MIPS) Leigh Winton - Head of Portfolio Strategy

Phone  Call us on 1300 752 663

...with offices based in Sydney, Brisbane, Melbourne and Perth