Standard Bank, the South African custody bank and trustee service provider, today announced the merger of its Cape Town-based institutional trustee servicing business with its Johannesburg-based custodial services division. With effect from 1 January 2003, the unit trust department of Standard Executors and Trustees Ltd (SET), will merge its operations with Standard Corporate and Merchant Bank’s (SCMB) Financial Asset Services (FAS) division.
The integration of the two business units is aimed at providing better client service, improved efficiencies and eliminating processing duplication, says David Price, FAS Director. “Industry and legislative changes require the business to change radically,” he says. “Historically FAS and SET have operated independently. Global best practice and the introduction of new legislation have necessitated a review of both trustee and custody operations within the Standard Bank Group.”
New legislation contained in the soon-to-be-enacted Collective Investments Schemes bill in South Africa imposes more stringent fiduciary responsibilities on the trustees of unit trusts.
To fully comply with these new requirements, a decision was made within the group to align the closely related functions of trustee and custodian. This will allow the trustee operation to take full advantage of the compliance monitoring and investment accounting-related technology currently being deployed in the custodial services division (FAS).
“A strong interdependency between the group’s custody and the unit trust trustee business has always existed. The new bill only accentuates the requirement for the two areas to work more closely together,” says Price.
As part of the restructuring, FAS will open a Cape Town office and establish a customer relationship management (CRM) team to service the region. This team will be responsible for all CRM activities related to the existing unit trust business as well as the servicing and marketing of other custody and accounting-related products to Cape Town asset managers and retirement funds.
“This restructure provides a unique opportunity for FAS to consult with our Cape Town clientele on a regular basis to enhance our custody related products,” says Adam Bateman, Head of Product and Business Development. “FAS will be the only custodian with a Cape Town presence, which gives us a unique competitive advantage. The bank intends to position the unit trust trustee business at the forefront of new services related to custody and settlement in South Africa. It will be launching major new products in 2003 with many enhancements to existing products/services simultaneously.”
The Financial Asset Services Division of Standard Bank currently has over ZAR 750 billion in assets under custody and provides custody, trustee, securities lending and accounting related services to South African unit trust companies, fund mangers, retirement funds, broker dealers and offshore banks.