A high-growth/low-inflation economy and robust political and economic institutions have helped Australia rank as the 14th largest economy in the world and the 4th largest in the Asia Pacific region.
ASX Group offers primary market and trading services through the Australian Securities Exchange, clearing through ASX Clearing Corporation and settlement and depository services through ASX Setttlement Corporation.
ASX Group recognises that its ability to achieve its commercial and operating goals is dependent upon the value its services deliver to customers. This section describes those services.
Underpinning ASX Group's long-term success as a market operator and provider of clearing and settlement services is its ability to reliably and fairly provide high-quality, high-performance systems and processes.
ASX Compliance oversees ASX Group's obligations as a market operator and clearing and settlement facility operator. This section contains all rules, notes and waivers pertaining to markets operated by ASX Group.
A searchable repository of documentation, speeches and announcements relevant to ASX shareholders, market participants, the media, and the general public.Clearing
ASX Clearing Corporation assists ASX participants to more effectively undertake their clearing activity by reducing systemic risk, minimising counterparty risk and by increasing capital efficiency and operating efficiency.
This is achieved through ASX Clearing Corporation’s wholly owned subsidiaries, ASX Clear Pty Limited and ASX Clear (Futures) Pty Limited, which provide central counterparty facilities as well as risk management systems, securities collateralisation services and electronic 'straight through' processing of trades.
Risk management activities are designed to ensure that the interests of its participants and clients are protected and that the integrity of the marketplace is maintained. These activities are primarily focused on two key types of risk: Market Risk and Credit Risk.
Market Risk
Market Risk represents the exposure of the clearing house to its clearing participants irrespective of the performance of individual participants. It encapsulates factors that impact upon the entire market such as extremely large price movements, for example, the October 1987 share market crash.
Credit Risk
Credit Risk represents the exposure of the clearing house to a loss arising from actions undertaken by an individual clearing participant and its clients. Such factors may include a deterioration of the capitalisation of a participant, or a participant holding a position that is beyond its financial capacity to absorb a loss arising from that position.
Risk Management
ASX undertakes a number of activities to manage these risks including the following:
- Margins and position monitoring
- Capital Based Position Limits
- Guarantee and Capital Reserve
- Admission Criteria, including ongoing minimum financial adequacy requirements
- ASX operates a fidelity fund to cover losses sustained by a client of an ASX participant caused by dealings with participants, such as defalcation or fraudulent misuse of money or other property which was entrusted to the participant for the purposes of securities trading.
Third Party Clearing
Trading participants may designate another entity, such a bank, as their clearing participant for trading activity. The balance sheet of the designated clearing participant is used to evaluate the adequacy of capital for trade. Third party clearing has allowed the entry of new trading participants into the markets, as well as providing established clearing participants with a new line of business.