ASX seeks to set record straight on Australian clearing

The Australian Stock Exchange seeks to clarify the landscape with clearing in Australia.

The Australian Stock Exchange (ASX) has sought to clarify the landscape with clearing in Australia.

Earlier this month, John Fildes, the CEO of Chi-X Australia, told it was unsatisfactory that Chi-Xwas still required to go via Trade Acceptance Services (TAS) before getting through to the Clearing House Electronic Subregister System (CHESS) and that did not fulfil the Council of Financial Regulators’ requirements for equal access.

According to ASX, trades executed on ASX and Chi-X are cleared and settled using CHESS and ultimately provide the same services: novation, netting and settlement. 

A spokesperson for ASX explained that Chi-X uses TAS as a mechanism to submit trades to the clearing house. TAS provides trade verification. CORE is the name of the system which provides a mechanism that performs verification for ASX trades.

“However, there are differences in the design for practical reasons,” said the spokesperson. “TAS requires authentication and encryption both ways because the information comes from an external party. CORE has no such requirement as the information comes internally. CORE provides real-time trade rejection notifications only, whereas TAS provides real-time verification on both trade acceptance and rejection. In terms of efficiencies, there is no real difference between the two systems.”

ASX has made available a report on the availability and verification metrics for both TAS and CORE. For the three months to 20 September, the average system availability for TAS was 99.94% and the average system availability for CHESS was 100%

There were no rejected trades for TAS during that period. For the previous quarter, four trades were rejected out of a total of approximately 11 million.

Trade acceptance levels for CHESS saw 62 rejections out of 46 million trades in the quarter to 20 September 2013.  For the previous three months, 2,247 trades were rejected out of 55 million trades.