The ASX has updated its cash equities clearing and settlement services following the release of new policy statements from the Council of Financial Regulators (CFR).
Under the updated code of practice, the Business Committee will be recognised as the primary advisory body with regard to the operation of the ASX’s clearing and settlement services.
ASX group executive Amanda Harkness said the new regulation will formalise the way ASX interacts with clearing and settlement service users to ensure the exchange’s infrastructure meets global standards.
“ASX welcomes the clarity provided by the release of the Regulatory Expectations and the policy statement on Minimum Conditions for Safe and Effective Competition in Cash Equity Clearing in Australia,” she said.
“We have taken immediate steps to address these Regulatory Expectations by updating our Code of Practice.”
In a statement, Treasurer Scott Morrison said the Government welcomed the new policy statements, adding that the new regulations were “a further step” in opening competition in the clearing of cash equities.
“These reforms to the market in the provision of clearing and settlement facilities are part of the Turnbull Government’s competition law reform agenda and demonstrate our commitment to open and competitive markets, which are fundamental to a vibrant, modern, world-leading economy,” the statement said.
“The Government asked the CFR to prepare the policy statements in March, on our acceptance of the CFR’s recommendations following their Review of Competition in Clearing Australian Cash Equities.”
APX Settlement chief executive David Lawrence commented that the company, a developer of alternative settlement initiatives, was pleased to see the first steps in opening up competition were being taken, but added that more was needed to fix existing problems within the system.
"We believe the discussion needs to also extend along the full service chain beyond clearing and settlement into the contestability of asset registration services, currently a key component of the ASX’s CHESS system, and largely excluded from policy review to date - competition alone does not solve fundamental problems," he said.
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