The FINANCIAL — The Australian Securities Exchange (ASX) welcomes the conclusion in the Reserve Bank of Australia’s (RBA) Review of Settlement Practices for Australian Equities, released on May 26, that current settlement practices have served the Australian equity market well over a number of years.
Mr Colin Scully, ASX’s Group Executive, Operations said: “ASX Settlement and Transfer Corporation has processed rapidly rising levels of Australian equity trading activity in recent years in a manner that has contributed to the efficient operation of the overall market.”
“While the events of 29 and 30 January 2008 presented challenges to the settlement arrangements on those days, ASX believes the existing systems worked effectively and as they were designed to do”, said Mr Scully.
The RBA’s Review of Settlement Practices for Australian Equities also raises the issue of minimising settlement delays. ASX released a consultation paper on 28 March on short selling and the management of settlement risk that included discussion on the same issue.
On the minimising of settlement delays, ASX has today released a market circular detailing measures it will introduce to promote further settlement efficiency and improve the management of settlement risk. These measures include the introduction of a close-out requirement, an increase in settlement delay fees, and accelerated processes for referring lengthy settlement delays to the ASX Disciplinary Tribunal. More information on these measures is contained in the attached market circular.
Mr Scully said: “ASX will continue to examine ways to improve our processes. The independent RBA review is an important step along this path, and we will work with the RBA and market participants to explore options that strengthen the value of a robust and well-tested settlement infrastructure.”
On the issues around the reporting of short selling, ASX is continuing to consider the submissions and the nature of possible changes to ASX rules resulting from the legislative changes foreshadowed by the Government.
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