Beneficial Ownership by Country of Residence of Commonwealth Government Securities
and State Government Securities Guaranteed by the Commonwealth
The following tables are published to meet the requirements of the Guarantee of State and Territory Borrowing Appropriation Act 2009. The Act requires the AOFM to establish, and publish on its website each quarter, a register recording the beneficial ownership, by country, of all securities issued by the Commonwealth and any securities guaranteed by the Commonwealth that are issued by Australian States or Territories.
The Act contains no provisions to compel the provision of information to the AOFM by the beneficial owners of securities or by persons holding securities on their behalf. This has limited the information available to the AOFM to form an opinion on the beneficial ownership of the securities. In particular:
- The Australian Custodial Services Association (ACSA) has advised the AOFM on behalf of its members that, because of their fiduciary and contractual obligations to their clients, they cannot provide client information to the AOFM unless there is a clear legal or regulatory compulsion to do so. In the absence of this information the AOFM has not been able to form an opinion on the beneficial ownership of securities held by custodian and nominee companies.
- Some information has been made available to the AOFM by Austraclear and State central financing authorities on the condition that it will not be published in a form that would allow individual holdings of securities to be identified or deduced, or changes in individual holdings to be identified or deduced. In the tables, some countries have been grouped together by region to meet this condition.
The figures in the tables represent opinions formed by the AOFM based on limited information. The AOFM does not believe that they provide any indication of the likely distribution by country of the beneficial ownership of securities held by custodian and nominee companies, or are representative of the distribution of the beneficial ownership of the total securities on issue.
Note: Beneficial ownership data has been revised back to September 2010 reflecting a correction of the beneficiary status of some holdings. In particular, the AOFM has identified that some holdings are those of a custodian business rather than of exclusively Australian beneficiaries as previously classified.
Table 2: Beneficial Ownership by Country of Residence of Australian Government Securities and State Government Securities Guaranteed by the Australian Government - Share of total (per cent) [XLSX 21KB]
Compilation of the Bond Register
To ascertain the country of beneficial ownership of the securities covered by the legislation, the AOFM has reviewed where possible the ownership records of the registry or depository systems in which they are held. The AOFM has reviewed the name of the accounts which are registered as holding these securities and from this information and knowledge of the business identified sought to form opinions on the country of domicile of the beneficial owners. However this information is insufficient to ascertain beneficial ownership where securities are listed as held by custodians or nominees.
As the legislation does not provide the AOFM with the power to compel security holders, custodians and nominees to provide AOFM with information on the beneficial ownership of securities, the AOFM has been restricted to information provided on a voluntary basis from these sources.
For domestic Commonwealth Government Securities issued by the Australian Government all but a small fraction is held in the Austraclear system. The residual is held in the RBA Registry by typically small investors. Austraclear has given AOFM permission to use its reports for the purpose of the Bond Register subject to not breaching the confidentiality requirements imposed by the Austraclear System Regulations.
Only two States, Queensland and New South Wales, currently have debt securities that are guaranteed by the Commonwealth. Their domestic securities are held in Austraclear and they have some offshore securities held in overseas depository systems operated by Clearstream and The Depository Trust Company. The central financing authorities for these States, Queensland Treasury Corporation and Treasury Corporation have provided Austraclear information on registered holdings of relevant securities and more limited information from overseas depositories subject to confidentiality restrictions.
In reviewing the Austraclear registered holdings records for Commonwealth and Commonwealth-guaranteed securities, the AOFM has considered information on the entity identified (such as ASIC records of their registered offices and legal structure) and the nature of their business activities.
- The registered owner has been taken to be the beneficial owner unless there is evidence to the contrary.
- Securities sold under repurchase agreements have been taken to be owned by the purchaser (as registered in Austraclear) rather than the seller. This includes repurchase transactions undertaken under the AOFM’s Securities Lending Facility.
- The country of beneficial ownership of Australian branches of a foreign financial institution has been taken as the country of domicile of the parent.
- The country of beneficial ownership of an Australian subsidiary of a foreign financial institution has been taken as Australia.
- The country of beneficial ownership of holdings in safe custody by Australian banks has been taken to be Australia.
- The AOFM has not been able to form an opinion on the country of beneficial ownership of holdings by custodial and nominee businesses.
- The country of beneficial ownership of small holdings of CGS in the RBA Registry has been taken to be Australia.
- Holdings by supranational organisations are included as overseas not identified by country.
There are small amounts of CGS securities that were issued offshore in foreign currencies. The country of beneficial ownership of these securities has been taken to be the country in which they were originally issued.
The AOFM does not have sufficient information on holdings of securities in overseas depositories such as Clearsteam and Depository Trust Company to form an opinion as to the country of domicile of the beneficial owners other than they are likely to be foreign. These are included in the Register as overseas holdings not identified by country.
Other Data on the Ownership of Securities
The Australian Bureau of Statistics (ABS) publishes data on foreign investment in Australia which includes data on debt securities:
- 5302.0 Balance of Payments and International Investment Position, Australia, provides quarterly data on non-resident portfolio investment in the debt securities of the general government sector. This corresponds to foreign holdings of Commonwealth Government Securities (CGS) issued by the Australian Government. It also includes data on securities issued on behalf of State governments (this is broader than the Commonwealth-guaranteed securities covered by this Register). It does not provide information on holdings by country.
- 5352.0 International Investment Position, Australia: Supplementary Statistics, provides annual data on non-resident holdings by country for portfolio investment in all debt securities. This is broader than the general government and central borrowing authority sectors and includes domestic and offshore securities issued by banks and companies.