ASX Develops Electronic Settlement for IPO's

Telstra has agreed to be the first company to use a new electronic facility, developed by Australian Stock Exchange (ASX), to settle and process the institutional and broker firm component of a public float. Ziggy Switkowski, Telstra Chief Executive Officer, congratulated ASX on developing the new Delivery versus Payment (DvP) facility. He said it provided an electronic solution to a process which has previously been time consuming, costly and inefficient. According to Richard Humphry, ASX Managing Director, the new service is the world's first electronic DvP facility for public floats. "The development of the electronic settlement facility reflects ASX's strong commitment to providing leading edge technological solutions which deliver service improvements to our customers". "This service provides efficient, cost effective and irrevocable transfer of ownership and cleared funds in a paperless environment for new floats," Mr Humphry said. ASX National Manager, Trading and Clearing, Mr Chris Hamilton, said CHESS DvP settlement for IPOs had the potential to deliver substantial back office processing efficiencies to issuers, brokers and institutions. "One of the main advantages of the service is that it reduces registry processing costs by eliminating much of the paperwork. It offers fast and efficient settlement and reduces the settlement risk of cheques being dishonoured." The new DvP settlement facility for Initial Public Offerings (IPO) is based on ASX's successful Clearing House Electronic Subregister System (CHESS). CHESS DvP facilitates the efficient transfer of title and settlement of market transactions using an electronic clearing and settlement system. ASX has produced an information booklet to assist companies, underwriters, institutions and brokers considering using the CHESS DvP facility to settle IPOs. For a copy of the booklet, please email Sarah Collins.