The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Chris Pearce

Chris Pearce

Parliamentary Secretary to the Treasurer

26 October 2004 - 3 December 2007

Media Release of 15/02/2005

NO.007

Government gives in principle approval to new ASX clearing support arrangements

The Parliamentary Secretary to the Treasurer, the Hon Chris Pearce MP, announced today that he had given in principle approval to an application from the ASX to restructure its clearing support arrangements.

Under the ASX’s proposed new arrangements, responsibility for clearing support will be transferred from the National Guarantee Fund (NGF) to the Australian Clearing House Pty Limited (ACH). ACH is a wholly owned subsidiary of Australian Stock Exchange Limited. It operates as the central counterparty for transactions on ASX markets.

In recognition of ACH’s additional responsibilities, approximately $70 million is expected to be transferred from NGF to ACH once the application receives final approval.

Stringent conditions will be attached to the future use of any funds that are transferred to ACH. Most importantly, the funds can only be used for clearing support. They will not be available for other purposes. ASX plans to contribute capital of its own to ensure that ACH has sufficient financial backing.

The restructuring of ASX’s clearing support arrangements will provide ACH with greater flexibility to provide a wider range of services. It will also result in better risk management.

The creation of a single body with responsibility for managing clearing risk in relation to ASX markets will enable ACH to become fully compliant with the Reserve Bank’s Financial Stability Standards for Central Counterparties.

The change will not affect the NGF’s investor protection role. The rights of clients of ASX participants to make claims against the NGF will remain unchanged. The Government has been careful to ensure that the NGF will have enough money to deal with future investor protection claims.

15 February 2005
CANBERRA

 

Contacts:
Bernie Finn 03 9887 3890 or 0419 140 405
Jill Harvey 03 9887 3890