The Australian Competition and Consumer Commission has granted interim authorisation* to the Australian Stock Exchange Rules governing the operation of the Clearing House Electronic Subregister System (CHESS) for the settlement of securities in the stock market.
CHESS is an electronic system for the settlement and clearing of securities in the stock market. CHESS is the central register for electronic transfer of share ownership. The CHESS Rules** have been authorised by the ACCC since August 1998. However this authorisation expires on 28 August 2003.
The ASX is seeking re-authorisation of the CHESS Rules as it considers the Rules may raise competition concerns under the Trade Practices Act 1974. The ASX has advised that it is currently in the process of re-drafting the CHESS Rules in response to changes to the Corporations Act. The new CHESS Rules must be implemented by March 2004.
"The interim decision will allow the ASX to maintain its present arrangements until the new CHESS Rules are finalised", ACCC Chairman, Mr Graeme Samuel, said today.
The ACCC will now consult with interested parties on the CHESS Rules.
*The ACCC has the function, through the authorisation process, of adjudicating on certain anti-competitive practices that would otherwise breach the Trade Practices Act 1974. Authorisation provides immunity from court action, and is granted where the ACCC is satisfied that the practice delivers offsetting public benefits. Interim authorisation allows the parties to engage in the conduct prior to the ACCC considering the substantive merits of the application. The ACCC's decision in relation to interim authorisation should not be taken to be indicative of whether or not final authorisation will be granted by the ACCC.
**The ASX and the ASX Settlement and Transfer Corporation are seeking re-authorisation of the SCH Rules and specific provisions contained within the ASX Business and Listing Rules.