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Settlement arrangements for Approved Listing Market Operators in respect of their CHESS eligible financial products

Background

ASX Settlement Pty Limited (ASX Settlement) provides settlement arrangements for approved listing venues other than ASX (Approved Listing Market Operators or ALMOs) in respect of CHESS-eligible financial products listed on the markets of those ALMOs (ALMO-listed financial products).

These arrangements consist of two options:

A Transfer Facilitation Service where CHESS-eligible ALMO listed financial products can be transferred in real time by ASX Settlement Participants through CHESS. Payment is handled bi-laterally by participants outside of CHESS; or
A DvP Facilitation Service where CHESS-eligible ALMO listed financial products can be settled on a delivery versus payment (DvP) basis by ASX Settlement Participants through the CHESS settlement batch.

In addition to the above settlement solutions for their markets, ASX Settlement has put in place arrangements for ALMO-listed Issuers to use the ASX Primary Market Facility (PMF). The PMF enables ALMO-listed Issuers to use DvP settlement for certain capital raisings.

Users of Settlement Arrangements

ASX Settlement has approved each of the following listing market operators as an “Approved Market Operator” under the ASX Settlement Operating Rules in relation to the Transfer Facilitation Service, the DVP Facilitation Service and the ASX Primary Market Facility:

Asia Pacific Exchange Limited (APX);
National Stock Exchange of Australia Limited (NSX); and
SIM Venture Securities Exchange Limited (SIM)

Overview of the DvP Facilitation Service

The DvP Facilitation Service enables transactions in CHESS-eligible financial products listed on ALMOs to be settled in the CHESS daily settlement batch alongside other CHESS-eligible financial products between ASX Settlement Participants. This occurs through the submission of dual-entry settlement instructions by ASX Settlement Participants in CHESS. Once these instructions are submitted and matched, they are scheduled for settlement in the daily CHESS batch where the financial products and cash movements are irrevocably transferred DvP. These ALMO transactions are not cleared. ALMO listed securities are set up in CHESS by ASX. The set up process includes the creation of Issuer records and CHESS subregisters and establishing the link in CHESS with the Issuer’s share registry.

Settlement Facilitation Service: contractual framework

ASX Settlement makes the Transfer Facilitation Service and the DvP Facilitation Service to ALMOs on a fair and non-discriminatory basis under a Settlement Facilitation Service Agreement. An initial application fee, annual fees and other fees apply to each Service. An ALMO which takes up the DvP Facilitation Service will inherit the functionality of the Transfer Facilitation Service, i.e. the submission of demand-transfer settlement instructions by ASX Settlement Participants in CHESS.

Template of Settlement Facilitation Service Agreement (PDF 155KB)

Fees are also payable for the set-up and maintenance of securities and subregisters in CHESS along with other fees that are equivalent to current CHESS Issuer fees (PDF 72KB). The fees payable by Settlement Participants for effecting demand-transfers (Transfer Facilitation Service) or dual entry settlement instructions (DvP Facilitation Service) of financial products in CHESS reflect those payable in relation to financial products that are ASX listed.

An ALMO that seeks approval under the ASX Settlement Operating Rules to acquire either Service must meet minimum technical and operational standards. Those standards are set out in the ASX Settlement Operating Rules.

DvP Settlement of capital raisings by ALMO-listed issuers

ASX also offers ALMO-listed Issuers the capability to use the ASX Primary Market Facility (PMF). The PMF enables ALMO-listed Issuers to use DvP settlement for certain capital raisings. ALMO-listed Issuers must apply to ASX Settlement to use the PMF for capital raisings. The application process, procedures and fees that apply to use of the PMF by ALMO-listed Issuers is available (PDF 313KB). The fees payable for using the PMF reflect those payable in relation to ASX-listed financial products

Further Information

ASX seeks to engage, in a fair and equitable way and on a non-discriminatory basis, with all Australian listing market operators which have an interest in settlement arrangements. If you have an interest in being provided settlement arrangements as a listing market operator, please contact Karen Webb, Manager, Settlement Services on 02 9227 0445 or Karen.Webb@asx.com.au