ASX has been engaging with regulators in relation to the rules and other relevant regulatory aspects that need to be addressed to support any new or changed services and functionality for the new system, including our consultation process on the rule amendments involving three tranches of amendments.
The first tranche of operating rule amendments was released for public consultation on 15 November 2019, with the period for feedback closing on 17 January. ASX released its response to consultation feedback on the tranche 1 rule amendments on 22 May 2020.
The second tranche of operating rule amendments was released for public consultation on 21 February, with the period for feedback closing on 29 May. ASX released its response to consultation feedback on the tranche 2 rule amendments on 24 September 2020.
A further final round of consultation incorporating both the tranche 3 draft rule amendments and a consolidated rules package (across the three tranches) will commence in early August 2021.
The rule development timeline captures the key dates for the regulatory and public consultation processes across the three tranches of rule amendments for Day 1 of the new system. It also covers rule amendments addressing new business requirements generated through industry consultation for CHESS Replacement but which are not dependant on the new system and are being delivered prior to Day 1 through ASX business as usual (BAU) processes or the Corporate Actions STP Phase 2 Project. The timeline shows both completed and upcoming processes.
Public Consultation on Tranche 1
On 15 November 2019, ASX released a consultation paper on the first of three tranches of operating rule amendments required to facilitate the implementation of the new system that will replace CHESS. These relate to accounts, participants, securities and pre-settlement aspects for Day 1 CHESS replacement system functionality.
The consultation paper invited feedback from users and other stakeholders on the operation of the draft tranche 1 rule amendments, including any unintended consequences.
Written submissions closed on 17 January 2020. ASX received a total of 12 submissions from a range of stakeholders including participants, registries, industry bodies and vendors.
On 22 May 2020, ASX released its response to consultation feedback received on the tranche 1 draft rule amendments. The response to consultation feedback contains:
- a summary of feedback received in stakeholder submissions;
- ASX's response to such feedback; and
- the draft rules changes made to the ASX Settlement Operating Rules and Procedures and ASX Clear Operating Rules and Procedures, which take into account feedback received.
Public Consultation on Tranche 2
On 21 February 2020, ASX released a consultation paper on the second of three tranches of operating rule amendments required to facilitate the implementation of the new system that will replace CHESS. These relate to corporate actions, mFund and RTGS payment aspects for Day 1 CHESS replacement system functionality. RTGS supports payments for corporate actions involving entitlement acceptances as well as payments for bilateral demand settlement instructions (addressed in tranche 1 rule amendments).
The consultation paper invited feedback from users and other stakeholder on the operation of the draft tranche 2 rule amendments including any unintended consequences.
Written submissions closed on 29 May 2020. ASX received a total of 11 submissions from a range of stakeholders including participants, registries, payment providers, an industry body and an approved listing market operator.
On 24 September 2020 ASX released its response to consultation feedback received on the tranche 2 draft rule amendments. The response to consultation feedback contains:
- a summary of the feedback received in stakeholder submissions;
- ASX's response to such feedback; and
- the draft rule changes made to the ASX Settlement Operating Rules and Procedures, which take into account feedback received.
Public Consultation on Tranche 3 and consolidation rules package
On 28 October 2020, as part of ASX’s response to consultation feedback on the CHESS Replacement Revised Implementation Timetable, ASX announced an amended timeline for a further and final round of consultation on the rule amendments for the new system.
Consultation on the third tranche of operating rule amendments as well as a consolidated rules package across all the rule amendments for the new system will commence in early August 2021, with a 15 week consultation period concluding in mid-November 2021. ASX will provide its response to consultation in mid May 2022, ahead of formal lodgement of the combined rules package with ASIC in late August 2022. This revised timing for consultation on the rules is to accommodate the changes connected with the redesign of the NBO process (as set out in section 2 of ASX’s 28 October 2020 response to consultation) and associated rules changes. This includes for operating rules addressed in earlier tranches and rules to be addressed in tranche 3.
ASX’s response to consultation feedback on the CHESS Replacement Revised Implementation Timetable also announced that:
- Electronic DRP and BSP elections, DRP and BSP enquiry and non-batch DvP bilateral settlement will be included as part of Day 1 CHESS replacement system functionality. Accordingly, rules supporting such functionality (included in the tranche 1 and tranche 2 draft rule amendments) are to be retained in the rules package to be consulted on in August 2021.
- Electronic acceptance and payment for entitlement offers will not form part of Day 1 CHESS replacement system functionality, and will be included in a future release. Accordingly, rules supporting that functionality (included in the tranche 2 draft rule amendments) will be removed from the rules package, and revised timing for these rules will be considered following day 1.
