Today’s Australian Financial Review reports that ASX is engaging in discussions to lower its clearing fees for cash equities, if the current market structure for equities clearing is extended for five years.
ASX is consulting with its customers and other stakeholders in conjunction with a review by the Council of Financial Regulators, and decision by the Government, on the market structure for cash equities clearing and settlement. The Council’s review is expected to be completed in the first half of 2015.
ASX is discussing a new tiered clearing fee structure which will apply to all customers in the event that the Council recommends, and the Government adopts, a five-year extension to the Code of Practice that ASX put in place in August 2013. The proposed changes to cash equities clearing fees will share the upside from growth and scale economies with the market. Based on the FY15 year to date value cleared of $3.8 billion per day, the proposed fee schedule would provide a 14.2% fee reduction to ASX’s customers. This equates to a revenue impact of approximately $6.8 million p.a.
ASX is aware that the options that the Council will consider include an extension of the Code of Practice, the introduction of competition or alternative regulatory mechanisms.
A summary of the rationale for a single infrastructure and the proposed fee schedule is attached.
Attachment: One-page summary of rationale and proposed fee schedule.
