ASIC ready to wield new power on ASX to force CHESS competition

afr.com:

The corporate regulator stands ready to wield a new rule-making power over the ASX, to ensure its second attempt to rebuild CHESS is pro-competition by allowing new entrants seeking to offer similar post-trading services to directly plug into the new clearing and settlement system.

Calissa Aldridge, executive director of the Australian Securities and Investments Commission’s markets group, said a new law, passed by parliament on September 6, will allow ASIC to create a competitive environment for services provided after an equity trade is made, by ensuring the new Clearing House Electronic Subregister System (CHESS) makes it easy for rivals to enter the space and reduce costs for investors.

“As soon as the Minister makes a determination on the product scope [under the new law] – which we anticipate to happen reasonably soon – that is something we want to get on to and do very quickly, to make sure the CHESS replacement facilitates competition,” she told a session at the ASIC Forum in Melbourne.

Not happy: Finclear’s David Ferrall, former Chi-X chairman Tony Mackay, Computershare’s Marnie Read and ASIC’s Calissa Aldridge at the ASIC Forum in Melbourne on Wednesday. Elke Meitzel

The changes to the Corporations Act were part of the government’s response to break ASX’s monopoly in clearing and settling cash equities trades, after its disastrous attempt to rebuild CHESS the first time with untested blockchain technology triggered widespread concerns ASX had put its own commercial interests above the broader market.

A new power for the Australian Competition and Consumer Commission has also been included, to allow it to arbitrate pricing disputes involving ASX and future competitors. ACCC chairman Gina Cass-Gottlieb told the