What is Clearing and Settlement in Australia

1. What is Clearing and Settlement in Australia The current state of clearing and settlement in Australia is a matter of debate, with some critics calling for a change. The Council of Financial Regulators (CFR) has been considering a number

2. of options to promote competition in clearing and settlement of OTC derivatives, including exchange-traded funds. The current monopoly of clearing and settlement in Australia is unsatisfactory and the market structure is unsustainable. The ASX may decide to scrap the Code of Practice, reduce the information available to market participants, and reintroduce trading service fees. But this will not reduce the number of investors or stockbrokers. A more modernised clearing and settlement system would benefit both stockbrokers and investors. It would also increase tax compliance and improve market surveillance. There are two types of clearing settlement facilities in Australia: securities settlement facilities and central counterparties. Both must be licensed by the Reserve Bank and comply with certain regulations. They must also adhere to a Financial Stability Standard (FSS) set by the regulator. The latest revisions are expected to take effect in 2012. The emergence of a new market operator like Chi-X Australia will force the market to reduce costs. This move will create competition at clearing and settlement level. However, there are risks that one organisation that owns a large portion of the market infrastructure will move the costs to its clearing component. That is why multiple clearing and settlement venues are essential to ensure that costs are not transferred to competitors. Contact Us Call Us: 1800 649 518 Mail Us: info@finclear.com.au Website: https://finclear.com.au/