Regulation of clearing and settlement services

The Treasury Laws Amendment (2023 Measures No. 3) Bill 2023 has been passed by both houses of Parliament to enable the Australian Securities and Investment Commission (ASIC) to make and implement rules and enforce requirements on a monopoly provider of clearing and settlement (CS) services of cash equities to achieve competitive outcomes

CS facilities provide a regular mechanism for parties to transactions in financial products to meet their obligations to each other that arise from entering into those transactions. They include central counterparties, securities settlement facilities and central securities depositories. Background.

The Bill amends the Corporations Act, the Competition and Consumer Act and ASIC Act to provide ASIC with powers to:
• implement and enforce requirements for a monopoly provider of CS services to operate in a way that achieves competitive outcomes; and
• ensure safe and effective competition in clearing and/or settlement should a competitor emerge.

The amendments also provide the ACCC with the power to conduct binding arbitration to resolve disputes regarding access to CS services where the CS service and the CS facility it is connected to are part of the same corporate group, and are covered by a declaration made by the Minister.

The overarching objective of these amendments is to facilitate outcomes for the monopoly provision of CS services which are similar to those which might be expected in a competitive environment, and to ensure that competition, if it emerges, is safe and effective. Regulators are to ensure that the regulatory framework is not a barrier to the emergence of competition. 

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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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