media release (25-019MR)

ASIC makes new clearing and settlement rules to promote competition

Published

ASIC has used new powers to promote competitive outcomes in clearing and settlement (CS) by requiring the ASX to provide its CS services on a transparent and fair basis, with a requirement to publish a comparison of fees against international providers.

This marks the first time ASIC has exercised its new powers under the Competition in Clearing and Settlement (CiCS) services reforms passed in September 2023 and enlivened by the Minister in May 2024.

ASIC Chair Joe Longo said the new rules supported the agency’s goal to promote strong and innovative development of the financial system.

‘This is about limiting ASX’s ability to misuse its monopoly power to deter new entrants,’ Mr Longo said.

‘The new rules support the long-term confident and informed participation of investors in Australian financial markets by establishing clear obligations to promote competitive outcomes in the provision of clearing and settlement services.

‘The clear and benchmarked pricing structure is intended to reduce competitive barriers to entry for entities unaffiliated with the ASX.

‘This is a key step in ensuring Australians have a fair, strong and efficient financial system.

‘More broadly, ASIC is actively looking at the regulatory settings for our markets and will release a discussion paper this week on the subject. These new rules demonstrate our commitment to acting where we see it is necessary.’

In accordance with these new rules, ASX must ensure its clearing and settlement services are offered in a transparent, non-discriminatory way.

The ASX will have to take all reasonable steps to:

  • ensure that the pricing of its services is transparent, fair and reasonable
  • provide access to its covered services (including data) on commercial, transparent and non-discriminatory terms, and
  • ensure that its core technology systems are designed and developed in a way that facilitates third-party access.

The new rules have been subject to public consultation, industry stakeholder engagement and input from the RBA and ACCC. The new rules will come into effect in three months.

ASIC has also published Response to submissions on CP 379 ASIC CS Services Rules (REP 808), highlighting the key feedback that arose from the submissions received on Consultation Paper 379 ASIC CS Services Rules (CP 379).

The new rules are a key component to one of ASIC’s five Strategic Priorities - to drive consistency and transparency across markets – that was laid out in its corporate plan.

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Background

The CiCS reforms that passed the Parliament in September 2023 and the May 2024 Corporations and Competition (CS Services) Instrument 2024 provided ASIC with rule-making powers in respect of ASX’s cash equity CS facilities.

The CiCS reforms were the culmination of extensive review and industry consultation by the Council of Financial Regulators (CFR) and the ACCC on the implications of competition in CS of cash equities in Australia, and calls from regulators for more powers. In 2017, the CFR published regulatory expectations for conduct in operating cash equity clearing and settlement services in Australia (Regulatory Expectations), which we have implemented as enforceable obligations in our CS Services Rules. We have also supplemented the Regulatory Expectations with requirements on technical interoperability, management of intragroup conflicts of interest, and external assurances on pricing and barriers to competition.

ASIC and the RBA are co-regulators of licensed CS facilities.

The RBA and ASIC have supervisory responsibilities for the four CS facilities in the ASX Group: two central counterparties – ASX Clear Pty Ltd and ASX Clear (Futures) Pty Ltd – and two securities settlement facilities – ASX Settlement Pty Ltd and Austraclear Limited. The ASIC CS Services Rules 2025 will apply to these subsidiaries and other ASX Group entities.