Trading & Settlement for Retail Debt Securities

Trading of ASX quoted debt securities is conducted between broking firms who act on behalf of their clients, in the same way as quoted equity securities. The trading is conducted electronically via the ASX Trade platform.  Settlement occurs in the Clearing House Electronic Subregister System (CHESS) where the participants are ASX brokers, specialist third party clearing organisations and approved institutions.

CHESS provides a central book entry register for transfers and holdings of approved securities. The holding balances maintained by the system are the record of legal title and form part of the issuers register. Settlement in CHESS normally occurs on a Trade date plus 3 (T+3) basis. CHESS enables investors to settle ASX interest rate securities electronically, the same way as shares thereby saving time and money.

To facilitate CHESS settlement, securities can be held on the register as a "CHESS Sponsored Holding" whereby the registry recognises the broker’s client as the registered holder but allows the broker access to that holding for settling in CHESS. Holders have the alternative of having their ownership recorded on the register as "Issuer Sponsored" which requires the holder to have an arrangement with a broker to settle in CHESS. Holdings and transfers on CHESS are recognised by the Corporations Act as a valid legal title and transfer of that title.

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