Competition in the provision of clearing and settlement services

Treasury has released for consulation exposure draft Corporations and Competition (CS Services) Instrument 2024 which specifies the classes of clearing and settlement services (CS services) in relation to which ASIC may impose requirements under the CS services rules, and the declared CS services to which access may be the subject of negotiations or arbitration under Part XICB of the Competition and Consumer Act 2010 (CCA). Background.

The draft instrument specifies CS services relating to cash equities.

Cash equity is defined to mean any of the following:
(a) a share in a body;
(b) an interest in a managed investment scheme or notified foreign passport fund;
(c) a legal or equitable right or interest in a share or interest covered by paragraph (a) or (b);
(d) an option to acquire, by way of issue, a share, interest or right covered by paragraph (a), (b) or (c);
(e) a right (whether existing or future and whether contingent or not) to acquire, by way of issue, a share, interest or right covered by paragraph (a), (b), (c) or (d).

This definition is intended to match what industry generally considers is a financial product covered by the term ‘cash equity’. For example, the definition is intended to capture transferable custody receipts and depository interests such as shares issued by a foreign company. The definition is not intended to capture warrants or securities based on debt instruments such as debentures or Commonwealth Government Securities depository interests.

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David Jacobson

Author: David Jacobson
Principal, Bright Corporate Law
About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.

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