Settlement services - Australia

03.12.2018

Pre-matching service

The table below summarises CBL's pre-matching service for external settlement instructions, as well as the pre-matching method and start time in the market. For details of CBL's pre-matching services, see Pre-matching services for external settlement instructions.

Service offeredMethod employedStart (local time)
Austraclear-eligible
Immediate Release Flag availableAutomated electronic Austraclear matching facilitySD-1 (or on receipt of instructions)
ASX-listed and CHESS-eligible
Immediate Release Flag availableAutomated electronic CHESS matching facilitySD-1 (or on receipt of instructions)
Unlisted equities
Immediate Release Flag availableManual via telephoneOn receipt of instructions
Connectivity mediumInstruction format
CreationOnline and Xact Web PortalTick to enable the "Immediate Release" option.
Xact via SWIFT and Xact File TransferField :22F::STCO/CEDE/IREL

Procedures for domestic counterparties

Procedure for the domestic counterpartyDeadline
Austraclear-eligible
Deliver to/Receive from: J.P. Morgan Nominees Australia Pty Limited - Austraclear mnemonic: CMNL20
BIC: CHASAU2XDCC
In favour of/By order of: CEDELULL, A/C 2312-0001-11-06
Market deadline
ASX-listed and CHESS-eligible
Deliver to/Receive from: J.P. Morgan Nominees Australia Pty Limited (CHESS PID: 20104)
BIC: CHASAU2XDCC
In favour of/By order of: CEDELULL, A/C 2312-0001-11-06
Market deadline
Unlisted physical
Deliver to/Receive from: J.P. Morgan Nominees Australia Pty Limited,

Level 31, 101 Collins Street, Melbourne,

Victoria 3000, Australia
In favour of/By order of: CEDELULL, A/C 2312-0001-11-06
Market deadline

Allowed countervalue difference

A maximum difference in countervalue of AUD 50 is allowed for the matching and settlement of against payment transactions with domestic counterparties. In the case of a discrepancy, the counterparty’s amount will prevail.

However, for CHESS transactions where the discrepancy does not exceed AUD 20 (or a smaller amount, depending on the transaction size), CHESS will automatically apply the lower of the two countervalue amounts. In such cases, therefore, the countervalue of the customer or of the counterparty may prevail.

Specific settlement rules / settlement restrictions

Bilateral cancellation for match settlements in Austraclear

A two-sided cancellation model for matched settlements in Austraclear applies. Cancellation for matched settlement in Austraclear requires counterparty cancellation confirmation before the settlement is cancelled. Settlement will still occur if the counterparty does not confirm the cancellation request.

Minimum tradable amounts

Minimum tradable amounts (for book-entry transactions) and minimum parcel amounts (for physical deliveries) may apply to certain Australian securities pursuant to Australian Corporations Law and to (Exemption) Order No. 82 promulgated under the Banking Act 1959 of the Commonwealth of Australia. Minimum tradable amounts/parcel amounts do not apply to internal transactions (CBL-CBL) and to Bridge transactions (CBL-Euroclear) settled for the account of non-Australian residents. However, before entering into transactions with Australian counterparties or before requesting a physical delivery, customers must verify the existence of any minimum tradable amount/minimum parcel amount that may apply to the respective securities issue.

Customers are responsible for complying with the relevant Australian laws and regulations. CBL will not assume responsibility for delayed external or physical transactions or for settlement failures that may result from a breach of the minimum tradable amount/minimum parcel amount.

Physical and issuer-sponsored Australian shares

Withdrawals

Customers that want to withdraw Australian shares from CBL should consider the following restrictions before submitting their delivery instructions:

  • It is extremely rare for Australian companies to issue physical share certificates. Generally, physical certificates are issued only in certain circumstances (for example, when the issuer is de-listed from the Australian Securities Exchange). Requests to withdraw Australian share positions from CBL will in almost all cases result only in the withdrawal of the position from CHESS. The withdrawn positions are re-registered as so-called issuer-sponsored positions in the books of the respective issuer's registry. The registry will then send a holding statement to the registered holder.
  • Issuer-sponsored holding statements are not sent to any party other than the registered holder unless the registered holder makes a request in writing that the registry forward the holding statements to another party. In practice, therefore, it is cumbersome to register the investor’s holding in his own name while requiring the registry to transmit the statements, for example, to the investor’s bank.
  • Most issuers pay dividends and other cash proceeds via direct credit to an Australian cash account. Once the holder has provided the registry with a cash account, dividends and other cash proceeds due to the holder are credited to the account through a direct credit arrangement. The cash account must always be held in the registered holder's name. If no cash account details are supplied, the registry will make payment via cheque sent to the registered address of the holder of an issuer-sponsored position. The processing of these cheques can easily result in a delay of several weeks between the issuance of the cheque and the actual availability of the funds to an overseas investor.
  • Even though some issuers offer direct credit arrangements, it is never possible to effect payments required for a corporate action through a direct debit arrangement. Holders of issuer-sponsored positions that want to participate in a corporate action that requires a cash payment should refer to the corporate action documentation for payment options. 

CBL facilitates withdrawals of Australian holding statements or share certificates to the holder in whose name the re-registration is requested only. Registered holders that want to amend the address to which subsequent holding statements or any issuer correspondence are sent must arrange this separately and directly with the registry once the initial holding statement or share certificate has been transmitted.

Customer withdrawal instructions must comply with the following specifications:

FieldContent
CreationOnline - Deliver Free
Receiving Agent: Party FormatName and Address
Receiving Agent: PartyTHE SHARE REGISTRAR
Buyer: Party FormatName and Address
Buyer: Partyrequested registration name and address
Registration Detailsrequested registration name and address
Xact via SWIFT and Xact File Transfer - MT542, Sequence E1
:95Q::REAG//THE SHARE REGISTRAR
:70D::REGI//requested registration name and address
:95Q::BUYR//requested registration name and address

Time frames can vary from one registry to another but the completion of the withdrawal request generally takes up to seven business days from submission of the customer's instruction until the actual mailing of the initial holding statement or share certificate. (This does not include the time taken for the mail delivery to the registered holder.) Depending on the issuer's registration formalities, CBL may need to contact the instructing customer to collect additional details required to complete the registration process.

Registration fees are passed on to the customer as charged by the Australian registry. The fee generally amounts to AUD 62 per registration request.

Re-registration of shares

In the Australian market equity securities can be held in dematerialised form (on the CHESS sub-register) or issuer sponsored.

Issuer sponsored securities are held directly with the relevant share registry rather than through a broker or custodian on the CHESS sub-register. The holder of the issuer sponsored securities will receive an issuer sponsored holding statement that will include a Security Reference Number (SRN) unique to that holding.

These equities can be moved between the CHESS sub-register and issuer sponsored (and vice versa) upon completion of the appropriate documentation.

A very small proportion of securities are held in physical form (unlisted securities). These securities are in registered form and ownership is generally represented via a certificate or issuer sponsored statement. These securities are not eligible to be held on the CHESS sub-register and must be held in this physical form.

CBL facilitates the re-registration of shares under the name of CBL’s depository (JPMC).

Customer must note that the registration process takes between 5-10 business days, provided that all required documents are in order.

In order to transfer the holding from an Issuer Sponsored Holding into CBL's depository’s nominee name, the depository requires the following:

  • A copy of the SRN/Issuer Sponsored Holding Statement confirming the holding in;
  • A completed Australian Standard Transfer Form (can be different per Registry); and
  • The Seller section of the Standard Transfer Form needs to be completed/signed.

If the current holder of the securities is a company, the share registry will request a certified copy of the authorised signatory list confirming who can sign on behalf of the company and ensuring:

  • The person who is signing includes their title; and
  • The person needs to state their name in plain English (non-cursive).

In regards to the certified copy of the signatory list:

  • The certification must be dated;
  • The certification must state that it is a "true copy of the original document".

All documentation is to be sent to:

J.P. Morgan Nominees Australia Pty Ltd
Settlements Department
Level 31,
101 Collins Street,
Melbourne,
Victoria 3000,
Australia

Please note that these are just indicative documents required by the registry, on a case by case basis.

Please also note that where a re-registration is rejected by the registry, the registry will provide the rejection letter to CBL’s depository via regular post with the returned documents. This process will take an additional 2-3 business days.

Procedures for registration

  1. CBL will credit the security into customer’s CBL account (MT544/545) once the documents have been forwarded to the appropriate registry and are awaiting re-registration. Please note that these securities will be blocked by both CBL and CBL's depository during this period.
  2. Once the security has been successfully re-registered, CBL and CBL's depository will then proceed with the unblocking.

Securities loans in CHESS

Customers must complete their instructions for settlement with counterparties in CHESS as follows whenever a securities loan is involved:

Xact via SWIFT and Xact File TransferCreationOnline
:22F::SETR//Type of Settlement Transaction
Borrowing
(borrower’s receipt instruction)
SECBSecurities Borrowing
Return from borrowing
(borrower’s delivery instruction)
SECBSecurities Borrowing
Lending
(lender’s delivery instruction)
SECLSecurities Lending
Return from lending
(lender’s receipt instruction)
SECLSecurities Lending

Back-to-back processing

Back-to-back processing is available for transactions in all CHESS- and Austraclear-eligible securities. If both the customer and the domestic counterparty meet their settlement obligations and fulfil the market's back-to-back requirements within the relevant deadlines, the linked receipt and the linked delivery will settle with same-day value. To benefit from this functionality, customers must ensure that their back-to-back transactions are formatted as per the following format, depending on the medium used:

Connectivity mediumPool ID formatField(s) to be used
CreationOnline16x a
and
Turnaround
Pool Reference

Type of Settlement Transaction
Xact via SWIFT and Xact File Transfer:POOL//16x a
and
:SETR//TURN
Field :20C: sequence A1

Field :22F: sequence E

a. The reference (16x) must neither start nor end with a single slash ’/’ nor must it contain two consecutive slashes ’//’.

Management of failed instructions

Receipts

Instructions for receipts that have not settled by the tenth attempted settlement day will be cancelled.

Deliveries

Instructions for deliveries that have not settled by the fifth attempted settlement day will be cancelled and the securities will be re-credited to the customer's account on that day (first attempted SD+5).

New issues settlement

Customers who successfully tender for a new equity or debt issue must instruct their agent to deliver the securities to CBL's account with JPMC AU. No special information is required other than the normal settlement receipt instruction; regular instruction deadlines apply.

Customers participating in a primary market offer distributed through CHESS should take note that the new issue will be distributed initially in the form of an interest allocation represented by a temporary ISIN. The conversion of the primary market allocation (equivalent to the temporary ISIN) distributed through CHESS into the "true" security (represented by its final/parent ISIN) occurs on the dispatch date. The dispatch date generally falls on the first business day following the interest allocation date and must be set no later than the second business day after the interest allocation date.

Secondary market transfers of the final/parent ISIN will be possible only on the first business day following the dispatch date. Customers should be aware that they cannot re-transfer a primary market allocation in the temporary or final ISIN between the interest allocation date and the CHESS dispatch date.