Clearing and Settlement of Cash Equities in Australia

Code of Practice

The Code of Practice for Clearing and Settlement of Cash Equities in Australia (the Code) commenced operation on 9 August 2013.

The Code has been approved by the Boards of ASX Limited, ASX Clear Pty Limited and ASX Settlement Pty Limited.  The Code was also reviewed by the Council of Financial Regulators prior to it being finalised.

ASX developed the Code following an announcement by the former Deputy Prime Minister and Treasurer on 11 February 2013, to defer a decision on any licence application from a central counterparty seeking to offer cash equities clearing services in Australia for a period of two years.

In developing the Code, ASX undertook a comprehensive industry consultation process involving a public call for submissions on a draft Code and consultation meetings with a wide range of industry stakeholders.

The Code reinforces ASX’s commitment to ensuring Australia’s clearing and settlement infrastructure is efficient, well capitalised and well regulated, and continues to meet users’ needs.

ASX commitments under the Code

The Code sets out ASX’s commitments in three key areas:

1.  the establishment of an advisory forum (the Forum) to allow ASX’s clearing and settlement participants, and a wide range of other industry stakeholders that are users of ASX’s clearing and settlement services to provide the Boards of ASX Clear and ASX Settlement with user input on the ongoing development of cash market clearing and settlement infrastructure and services

2.  transparent and non-discriminatory pricing of cash equities clearing and settlement services

    • access requests considered in a timely manner
    • protocols and procedures for responding to access requests by alternative market operators (AMOs) and alternative listing market operators (ALMOs)
    • information handling standards for AMOs and ALMOs
    • dispute resolution processes

3.  transparent and non-discriminatory terms of access to cash equities clearing and settlement services

    • access requests considered in a timely manner
    • protocols and procedures for responding to access requests by alternative market operators (AMOs) and alternative listing market operators (ALMOs)
    • information handling standards for AMOs and ALMOs
    • dispute resolution processes

Under the Code, ASX committed to publish protocols which set out target timeframes for ASX Clear and ASX Settlement to respond to requests from AMOs and ALMOs seeking standard access to clearing and/or settlement services. ASX also committed to include dispute resolution processes for AMOs and ALMOs for pre access disputes. The Access Protocols for AMOs and ALMOs can be viewed here.

Under the Code, ASX committed to maintain procedures for users to provide any comments or complaints in respect of the operation of the Code. The Comments and Complaints Protocol, which sets out how many users may provide comments or complaints in respect of the Code, is available here.

A copy of the Code can be viewed here.