T+1 Settlement Cycle
Communications regarding the T+1 settlement cycle
T+1 Settlement Cycle
Communications regarding the T+1 settlement cycle
Australia's cash equity market utilises the Clearing House Electronic Subregister System (CHESS) for clearing and settlement. Currently, trades settle on a T+2 basis, with securities transactions completing two business days after the trade date.
References to a potential move to T+1 settlement for the Australian cash equity market means settlement one business day after the trade date (T) (that is, T+1 is trade date plus one business day).
A move to shorter settlement cycles across the globe has been driven by a variety of stakeholders, including financial market intermediaries, regulators, governments and impacted participants. Global literature cites potential benefits of settlement cycle compression which can be broadly grouped as risk reduction, enhanced operational efficiency, and advantages for stakeholders.
Implementing and sustaining faster settlement cycles, such as T+1, entails various risks, costs and challenges, impacting stakeholders differently, compounded by challenges associated with global time-zones. These challenges include transition costs, capital expenditure, potential investor costs, and the emergence of new (and sometimes unintended) risks.
On 23 April 2024, ASX published an industry whitepaper following on from the establishment of the T+1 Working Group. The ASX Business Committee formed the T+1 Working Group in December 2023 to provide analysis and insights to the Business Committee on settlement cycle compression. Working group members have provided input into this paper. The paper Considerations for accelerating cash equities settlement in Australia to T+1 explores strategic considerations for a potential transition to T+1.
Stakeholders were encouraged to provide written feedback by 18 June 2024.
On 2 August 2024, ASX published a feedback summary document resulting from the publication of the whitepaper on Considerations for accelerating cash equities settlement in Australia to T+1. ASX sought industry feedback on a potential move to T+1 settlement in Australia, and received responses from a broad range of stakeholders. ASX thanks all stakeholders who took the time to provide a response.
In December 2023, ASX established the T+1 Working Group, comprised of volunteers from the ASX Business Committee. The purpose of the T+1 Working Group is to carry out focused analysis and to provide insights to the ASX Business Committee on settlement cycle compression. The Working Group is not a decision making forum and will report to the ASX Business Committee on its deliberations.
Company | Name | Title |
---|---|---|
ASX Limited (Markets) | Rob Nash | Senior Manager, Head of Equities Relationship Management, Markets, Trading Services |
ASX Limited (Securities and Payments) – Working Group Chair | Andrew Jones | General Manager, Equities |
Australasian Investor Relations Association (AIRA) | Ian Matheson | Chief Executive Officer |
Australian Custodial Services Association (ACSA) | Andrew Gibson | ACSA Director and Executive Sponsor, ACSA Operations Working Group |
Australian Financial Markets Association (AFMA) | Damian Jeffree | Senior Director of Policy |
BNP Paribas | Mark Wootton | Client Line Co-Head Asia Pacific |
Boardroom | Tharun Kuppanda | Head of Risk, Compliance and Regulatory Partnerships |
Cboe Australia Pty Ltd | Benjamin Phillips | Senior Director - Head of Product Development |
Citi | Christopher Moore | Senior Vice President, Custody and Clearing Product, Australia & New Zealand |
Commonwealth Securities Limited | William Berriman | Senior Manager – CommSec Operations |
Computershare | Scott Hudson | General Manager – Market Liaison |
FinClear Services Pty Ltd | Leigh Conder | Chief Operating Officer |
Goldman Sachs Australia Pty Ltd | Marton Laszlo | Executive Director |
Morgans Financial Limited | Daniel Spokes | Director, Client Support Services |
Stockbrokers and Investment Advisers Association (SIAA) | Judith Fox | Chief Executive Officer |
UBS Securities Australia Ltd | Conor Foley | Senior Business Manager |
Wealthhub Limited | Julie Mason | Head of Operations |
Name | Date of publication |
T+1 whitepaper feedback summary | 2 August 2024 |
Whitepaper - Considerations for accelerating cash equities settlement in Australia to T+1 | 23 April 2024 |