The Australian government says it will make the necessary alterations to the tax regime to enable the Australian Stock Exchange (ASX) to consolidate its equities and derivatives clearing houses and create a single Australian Clearing House (ACH) to act as a central counterparty.
The Australian Government announced recently that it would support legislation to change the Taxation Laws (Clearing and Settlement Facility Support) Bill 2003 to allow the Australian Stock Exchange (ASX) to transfer funds on a tax-free basis from the National Guarantee Fund (NGF) – a reform which will enable ASX to consolidate its equities and derivatives clearinghouses into a single regulatory regime and unit.
The ACH will consolidate the clearing of equities, warrants and fixed interest products – which are currently under license to ASX Settlement and Transfer Corporation (ASTC) – and options and futures (currently under license to Options Clearing House (OCH).
The Securities and Exchanges Guarantee Corporation (SEGC), an independent subsidiary of the ASX, administers the NGF. The SEGC currently provides both clearing guarantee and investor protection funding.
After the reform is complete – and it will be finalised by March 2004 – the ACH will take on the clearing guarantee functions and capital backing provided by the NGF.