Settlement

ASX Settlement Corporation assists ASX participants to more effectively minimise their settlement and operational risk.

This is achieved through ASX Settlement Corporation’s wholly owned subsidiaries, ASX Settlement and ASX Austraclear. These two settlement facilities provide a 'delivery versus payment' settlement service, secure asset holding services as well as a wide network that enables 'straight through processing'.

Delivery versus Payment

The process allowing transfer of both securities and money to occur simultaneously is called Delivery versus Payment (which is further described below).  

CHESS

Usually, three business days after a buyer and seller agree to a trade, CHESS effects the settlement of that trade.  It does this by transferring the title or legal ownership of the shares while simultaneously facilitating the transfer of money for those shares between participants via their respective banks.  This type of settlement is called Delivery versus Payment (DvP). 

The CHESS batch settlement reduces settlement exposure and improves operating efficiency by effectively providing multi-lateral netting of settlement positions across all ASX Settlement Participants. 

Austraclear

Austraclear is Australia’s settlement system and central securities depository (CSD) for the wholesale debt market. In contrast to the CHESS batch settlement, and reflecting that the debt market typically is characterised by a lower number of much higher value trades, Austraclear offers a line-by-line, Delivery versus Payment model providing, in real-time, the irrevocable exchange of cash for securities.

Securities Transfer

CHESS and Austraclear can also be used to facilitate the transfer of securities without payment where the participant takes on the separate responsibility for payment (if required).

Infrastructure

ASX Settlement Corporation provides its services in a highly automated environment. As a result, transactions are processed without the need for manual intervention, greatly reducing the cost of settlement and the risk of processing errors during the settlement cycle.

All ASX systems have a target of 99.998% uptime, with most systems typically achieving 100%. This record of resilience promotes trust in the operational reliability of the settlement facility, and provides confidence that trade conducted on markets managed by ASX will be settled in a timely and orderly fashion.

Central Securities Depository

Austraclear, by operation as a central securities depository, provides a safe and secure environment for the holding of records detailing investor and trader assets. This provides administrative efficiencies for assets held in the depository, especially in the context of managing corporate actions, such as dividends and coupons.

Settlement Network

ASX Settlement Corporation connects every major broker, major custodian, share register, and every bank in the exchange-traded marketplace, including many offshore connections.

Settlement participants benefit from not incurring the overhead of setting up their own networks. And rather than relying on a costly series of bilateral arrangements, they can rely on the extensive network provided by ASX to facilitate fast, efficient, robust electronic connections between settlement participants.

Public Benefits

ASX Settlement Corporation's services provide a simple, secure, convenient and reliable environment for traders & investors to undertake their activity. Such stable systems facilitates the growth of liquidity and improves price discovery.  This in turn, reduces an issuer's cost of capital and ultimately increases the capital available for investment within the Australian economy.