A report on clearing costs in Australia has been published by Market Structure Partners. It finds that the country is one of the world’s most expensive developed markets in which to clear and settle equities.
Ten of Australia’s largest users of equity clearing services commissioned the report on clearing costs, which benchmarked the costs of trading, clearing and settlement in 18 markets versus costs in Australia.
It said that clearing models varied significantly across regions. It noted that, “In markets where there are dominant, vertical, for-profit infrastructures, clearing costs tend to be at the highest level, and in markets where there are competitive or utility run models, costs tend to be at their lowest.”
The report found that clearing and settlement costs in Australia are high compared to global markets, even those of a similar size to Australia’s.
The conclusion of the report’s compiler stated that the entire Australian market is reliant on a single clearing entity and therefore questions whether the current model can yield the create the lowest costs for the whole market.