Section 04 - Account administration

Table of Contents

Table of Contents

Section 04 - Account administration

4.1 - Establishing a CHESS Holder and allocating a HIN

In order to hold financial products on the CHESS subregister, a holder’s details must be recorded on CHESS. CHESS will send account (HIN) registration details to the relevant issuer (registry) when financial products are entered into a holding for the first time.

Attributes of an account (HIN) are maintained within CHESS at two distinct levels:

  1. Account (or HIN) level: record that identifies account attributes and information relating to the registered holders of financial products recorded in the account. At this level, essential information about an account is maintained. This includes the registered address, communication preference, residency indicator, account type and ownership type. CHESS will generate an account identifier (being a holder identification number (HIN)) for the account.

  2. Holder level: record that identifies the full name of the individual(s) or entity(s) that are identified as the registered holders of a financial product in an account. CHESS will generate a holder identifier (being a universally unique identifier (UUID)), for each holder of an account (for example for joint holdings, each joint holder will be allocated a UUID).

At this time, the following attributes must not be provided for all holder types:

  • Account level attribute:

    • mobile number.

  • Holder level attributes:

    • holder address;

    • email address;

    • mobile number;

    • date of birth; and

    • Legal Entity Identifier (LEI).

All account and holder details must comply with CHESS standards and validations, refer to section 4.2 and Account and Holder Creation Overview for further details.

Procedure

Step

Description

Step

Description

1

The participant determines a requirement to create a new account in CHESS and establishes the relevant account and holder details.

2

The participant initiates the Account and Holder Creation Process, sending an Account Creation Request (acct_001) to CHESS with the account and holder details as outlined in Account and Holder Creation Overview. This includes the:

Where the account type is sponsored a signed sponsorship agreement should have been executed between the participant and holder.

The participant is also responsible for determining the residency of the holder according to the definition of a "foreign" person. The residency indicator must be consistent with the definitions of the relevant issuers constitution (refer to section 2.1.11).

The residency indicator records whether any holder is considered a "Foreign Person" for financial products with a foreign ownership restriction. "Mixed" indicates there are various holders with different residencies, typically used in an omnibus account. Participants should ensure they understand the implications of maintaining holdings in this manner. Such holdings may require the controlling participant to regularly notify an issuer (registry) of the foreign sub-balance of the mixed holding.

3

On successful creation of an account (HIN), ASXS notifies the sponsored holders of their account (HIN) and registration details.

Even if the new registration details pass CHESS validation and account (HIN) creation is successful, the details may still be unacceptable to the registry (refer to section 4.6).

4.2 - Registration Name and Address Standards

4.2.1 - Registration Concepts

The details of an account (HIN) are comprised of the:

  • account name (CHESS generated using the account name populated at the “holder” level);

  • designation;

  • mailing addressee line (generated by CHESS for the purposes of non electronic investor communications);

  • communication preference;

  • residency indicator;

  • account type (e.g. sponsored);

  • ownership type (i.e. joint or single holder); and

  • registered address.

CHESS derives the account name from the holder name(s). Where more than one holder exists the account name will be a concatenation of all holder names. Up to three distinct holders can be recorded against an account for a joint holding, however the system can accommodate up to four distinct holders being recorded against an account where the issuer's constitution allows more than three joint holders to be recorded.

ASX considers it is open to issuers to view the account name (registered name) as the members name for the purpose of the register of members under the Corporations Act.

CHESS sends the account (HIN) registration details to the relevant registry whenever financial products are moved into a holding for the first time and whenever registration details change for inclusion/update in the issuer’s register of members.

Registration details for such clients who choose to hold financial products on the issuer sponsored subregister are not maintained by CHESS.

Registration details should reflect the standards detailed in the Account and Holder Creation Overview.

4.2.2 - Registered Name Standards

Holder Name

Holdings must be registered in the correct legal name of the holder. For example, in the case of a person or a company carrying on business under a registered business name, the holding should be registered in the person’s or company’s legal name rather than the business name. In the case of holdings held on trust, the holdings should be registered in the name of the trustee or trustees of the trust rather than in the name of the trust. In the case of holdings for the estate of a deceased person, the holdings should be registered in the name of the legal representative or representatives of the deceased person.

Company names can only be abbreviated by the use of legally accepted abbreviations such as CO, PTY, and LTD.

Enter names of individuals in the following order:

  1. Given name(s) in full; then

  2. Surname.

For further details refer to Holder Name.

Designation

Where an account designation is required to be recorded after the holder name(s) (e.g. NO 2 ACCOUNT or SUPERANNUATION ACCOUNT), enter this in the designation field followed by the word ACCOUNT. A/C may be used if space is restricted.

Designations should not give notice of a trust (including any testamentary trust or custodial arrangement), whether express, implied or constructive, on the register (refer to section 1072E(10) of the Corporations Act).

It is acceptable to use the “ACCOUNT” or “A/C” designation to differentiate between personal holdings and holdings held as trustee or custodian however as noted above, the designation cannot give notice of a trust.

Refer to Designation for further details.

4.2.3 - Permitted ASCII Characters per Field

ASCII - DEC

Character

Individual name

Company name

Designation

All address attributes

Email address - local part

Email address - domain part

Legal Entity Identifier

Mobile Number

Account name

ASCII - DEC

Character

Individual name

Company name

Designation

All address attributes

Email address - local part

Email address - domain part

Legal Entity Identifier

Mobile Number

Account name

32

<space>

Y

Y

Y

Y

N

N

N

N

Y

33

!

N

Y

Y

Y

Y

N

N

N

Y

34

"

N

Y

Y

Y

N

N

N

N

Y

35

#

N

Y

Y

Y

Y

N

N

N

Y

36

$

N

Y

Y

Y

Y

N

N

N

Y

37

%

N

Y

Y

Y

Y

N

N

N

Y

38

&

N

Y

Y

Y

Y

N

N

N

Y

39

'

Y

Y

Y

Y

Y

N

N

N

Y

40

(

N

Y

Y

Y

N

N

N

N

Y

41

)

N

Y

Y

Y

N

N

N

N

Y

42

*

N

Y

Y

Y

Y

N

N

N

Y

43

+

N

N

Y

Y

Y

N

N

Y

Y

44

,

N

Y

Y

Y

Y

N

N

N

Y

45

-

Y

Y

Y

Y

Y

Y

N

Y

Y

46

.

N

Y

Y

Y

Y

Y

N

N

Y

47

/

N

Y

Y

Y

Y

Y

N

N

Y

48

0

N

Y

Y

Y

Y

Y

Y

Y

Y

49

1

N

Y

Y

Y

Y

Y

Y

Y

Y

50

2

N

Y

Y

Y

Y

Y

Y

Y

Y

51

3

N

Y

Y

Y

Y

Y

Y

Y

Y

52

4

N

Y

Y

Y

Y

Y

Y

Y

Y

53

5

N

Y

Y

Y

Y

Y

Y

Y

Y

54

6

N

Y

Y

Y

Y

Y

Y

Y

Y

55

7

N

Y

Y

Y

Y

Y

Y

Y

Y

56

8

N

Y

Y

Y

Y

Y

Y

Y

Y

57

9

N

Y

Y

Y

Y

Y

Y

Y

Y

58

:

N

Y

Y

Y

N

N

N

N

Y

59

;

N

Y

Y

Y

N

N

N

N

Y

60

<

N

N

N

N

N

N

N

N

N

61

=

N

Y

Y

Y

Y

N

N

N

Y

62

>

N

N

N

N

N

N

N

N

N

63

?

N

Y

Y

Y

Y

N

N

N

Y

64

@

N

Y

Y

Y

N

N

N

N

Y

65

A

Y

Y

Y

Y

Y

Y

Y

N

Y

66

B

Y

Y

Y

Y

Y

Y

Y

N

Y

67

C

Y

Y

Y

Y

Y

Y

Y

N

Y

68

D

Y

Y

Y

Y

Y

Y

Y

N

Y

69

E

Y

Y

Y

Y

Y

Y

Y

N

Y

70

F

Y

Y

Y

Y

Y

Y

Y

N

Y

71

G

Y

Y

Y

Y

Y

Y

Y

N

Y

72

H

Y

Y

Y

Y

Y

Y

Y

N

Y

73

I

Y

Y

Y

Y

Y

Y

Y

N

Y

74

J

Y

Y

Y

Y

Y

Y

Y

N

Y

75

K

Y

Y

Y

Y

Y

Y

Y

N

Y

76

L

Y

Y

Y

Y

Y

Y

Y

N

Y

77

M

Y

Y

Y

Y

Y

Y

Y

N

Y

78

N

Y

Y

Y

Y

Y

Y

Y

N

Y

79

O

Y

Y

Y

Y

Y

Y

Y

N

Y

80

P

Y

Y

Y

Y

Y

Y

Y

N

Y

81

Q

Y

Y

Y

Y

Y

Y

Y

N

Y

82

R

Y

Y

Y

Y

Y

Y

Y

N

Y

83

S

Y

Y

Y

Y

Y

Y

Y

N

Y

84

T

Y

Y

Y

Y

Y

Y

Y

N

Y

85

U

Y

Y

Y

Y

Y

Y

Y

N

Y

86

V

Y

Y

Y

Y

Y

Y

Y

N

Y

87

W

Y

Y

Y

Y

Y

Y

Y

N

Y

88

X

Y

Y

Y

Y

Y

Y

Y

N

Y

89

Y

Y

Y

Y

Y

Y

Y

Y

N

Y

90

Z

Y

Y

Y

Y

Y

Y

Y

N

Y

91

[

N

N

N

N

N

N

N

N

N

92

\

N

Y

Y

Y

N

N

N

N

Y

93

]

N

N

N

N

N

N

N

N

N

94

^

N

N

N

N

Y

N

N

N

N

95

_

N

Y

Y

Y

Y

N

N

N

Y

96

`

N

N

N

N

Y

N

N

N

N

97

a

Y

Y

Y

Y

Y

Y

N

N

Y

98

b

Y

Y

Y

Y

Y

Y

N

N

Y

99

c

Y

Y

Y

Y

Y

Y

N

N

Y

100

d

Y

Y

Y

Y

Y

Y

N

N

Y

101

e

Y

Y

Y

Y

Y

Y

N

N

Y

102

f

Y

Y

Y

Y

Y

Y

N

N

Y

103

g

Y

Y

Y

Y

Y

Y

N

N

Y

104

h

Y

Y

Y

Y

Y

Y

N

N

Y

105

i

Y

Y

Y

Y

Y

Y

N

N

Y

106

j

Y

Y

Y

Y

Y

Y

N

N

Y

107

k

Y

Y

Y

Y

Y

Y

N

N

Y

108

l

Y

Y

Y

Y

Y

Y

N

N

Y

109

m

Y

Y

Y

Y

Y

Y

N

N

Y

110

n

Y

Y

Y

Y

Y

Y

N

N

Y

111

o

Y

Y

Y

Y

Y

Y

N

N

Y

112

p

Y

Y

Y

Y

Y

Y

N

N

Y

113

q

Y

Y

Y

Y

Y

Y

N

N

Y

114

r

Y

Y

Y

Y

Y

Y

N

N

Y

115

s

Y

Y

Y

Y

Y

Y

N

N

Y

116

t

Y

Y

Y

Y

Y

Y

N

N

Y

117

u

Y

Y

Y

Y

Y

Y

N

N

Y

118

v

Y

Y

Y

Y

Y

Y

N

N

Y

119

w

Y

Y

Y

Y

Y

Y

N

N

Y

120

x

Y

Y

Y

Y

Y

Y

N

N

Y

121

y

Y

Y

Y

Y

Y

Y

N

N

Y

122

z

Y

Y

Y

Y

Y

Y

N

N

Y

123

{

N

Y

Y

Y

N

N

N

N

Y

124

|

N

Y

Y

Y

N

N

N

N

Y

125

}

N

Y

Y

Y

N

N

N

N

Y

126

~

N

Y

Y

Y

N

N

N

N

Y

4.2.4 - Registration Address Standards

A registered address must be recorded for each account created within CHESS. If the address includes a floor, flat, unit or apartment, enter it in full if space permits. For example, for the address “Unit 100, 100 George Street, Sydney, NSW, 2000, Australia the address fields may be provided as follows:

Address Attribute

Example

Address Attribute

Example

Address Line 1

Unit 100, 100 George Street

Address Line 2

N/A

Address Line 3

N/A

Town Name

Sydney

Post Code

2000

State (Country Sub Division)

NSW

Country

AU

Enter the words STREET, ROAD, AVENUE, etc, in full if space permits.

A DX box number is not an acceptable form of address. Australia Post does not recognise DX box numbers as valid addresses.

For further details, refer to Address.

4.2.5 - Communication Preference

The communication preference identifies the method in which communication from ASXS to the issuer (registry) and the holder is delivered. Participants must elect a communication preference, options are outlined in the table below.

Communication Preference

Description

Post

Communication from ASX and the issuer (registry) will be delivered via post.

Electronic – ASX Only

Communication from ASX will be delivered electronically via email. Issuer (registry) communication will be delivered via post

Electronic – Issuer Only

Communication from the issuer (registry) will be delivered electronically via email. ASX communication will be delivered via post.

Electronic – ASX & Issuer Only

Communication from ASX and the issuer (registry) will be delivered electronically via email.

 Where the communication preference elected is any of the three ‘electronic' options, an email address at the account level must be provided.

4.3 - Provision of Email Addresses

An email address is an optional attribute that may be populated by the participant with from the security holder.

Email details can be supplied at the time of account (HIN) creation (refer to section 4.1) or updated to an existing account (HIN) (refer to section 4.7.3).

4.3.1 - Email Address

An email address is specific to an account (HIN). Only one email address per account (HIN) is captured. CHESS provides limited validation on email addresses submitted by participants. The email address must include an @ symbol, at least one full stop and contain no spaces.

For further details refer to Email Address.

4.3.2 - Updates or Cancellation to an Email Address

Cancellations or updates to an email address do not require authorisation by ASX Operations.

The participant must have sufficient authority to effect the update or cancellation to the security holder’s email address.

The participant must retain all documentation relating to the email detail for audit purposes. Appropriate documentation may include:

  • signed letter from the security holder;

  • sample letterhead with the organisation’s new email address;

  • letter from the company secretary; or

  • records from a secure, password-protected website.

For further details refer to section 4.7.

4.4 - Provision of Tax File Numbers (or TFN Exemption Codes) and Australian Business Numbers

CHESS supports the provision of Tax File Numbers (TFNs) and/or TFN exemption codes and Australian Business Numbers (ABNs) to a nominated issuer (registry) for a holding that the participant controls.

A TFN, TFN exemption code or ABN may be provided for each named holder. Alternatively, a single TFN, TFN exemption code or ABN may be provided for the account (HIN), for example in the case of a non-individual investor entity type.

CHESS does not validate the TFNs, ABNs, or TFN exemption codes submitted by participants. ASXS shall not be liable for any losses or expenses arising from these details not being recorded by an issuer (registry).

Participants also must provide the investor entity type. The table below details the valid investor entity types and corresponding codes. 

Investor Entity Type

Code

Individual

SIGL

Deceased Individual

DECD

Company

COMP

Trust

TRST

Partnership

PRTN

Superannuation Fund

SPFD

Government Organisation

GOVN

Other Non-Individual

OTHR

For further details on TFN exemption codes, refer to Tax File Number (TFN) Exemption Codes.

TFNs, TFN exemption codes and ABNs are not recorded on the CHESS subregister and CHESS holding statements for sponsored holders do not carry a notation stating whether or not a TFN or ABN has been quoted.

For further details refer to Investor Data Overview.

4.4.1 - Submitting TFNs, TFN Exemption Codes and ABNs for CHESS Holdings

Participants may submit TFNs, TFN exemption codes and ABNs for holdings they control on the CHESS subregister. An issuer (registry) should record these details as per ASX Settlement Operating Rule 8.19.4. Participants should be mindful of approaching record dates and submit these as early as possible.

This procedure is only applicable where TFNs (etc) are submitted for a non-mFund holding or an mFund holding post initial application.

Procedure

Step

Description

Step

Description

1

Participants receive TFNs, TFN exemption codes or ABNs from clients and enter the details into an Investor Data and Foreign Tax Status Details (acct_012) message for forwarding to the issuer (registry) by CHESS through the Investor Data and Foreign Tax Status Submission Process.

2

CHESS receives the message and forwards the investor details to the nominated issuer (registry). If the nominated holding has both a zero balance and a zero cum entitlement balance, CHESS rejects the Investor Data and Foreign Tax Status Details (acct_012).

3

CHESS notifies the participant that the advice has been sent to the issuer (registry). The issuer (registry) should use the details provided to update its internal records.

4.4.2 - Submitting TFNs, TFN Exemption Codes and ABNs for Transfers between Subregisters

Participants are able to submit TFNs, TFN exemption codes and ABNs for the purposes of transfers through the creation of a Registration Identifier (RGID). For further details, refer to section 6.2.

4.5 - Provision of Bank Account Details

CHESS supports the provision of domestic or foreign bank account details to a nominated issuer (registry) for a holding that the participant controls on the CHESS subregister. Bank account details support the electronic direct credit of payments by an issuer (registry).

Participants should be aware that in providing a security holder’s bank account details to the issuer (registry) for the purposes of the electronic direct credit of a dividend payment for a security, the issuer (registry) is not likely to automatically disregard a security holders previously submitted DRP/BSP election where a plan is in operation for that security.

CHESS provides limited validation on both bank account details submitted by participants.

Whether the issuer (registry) will accept the bank account details is dependant on issuer participation, and the registry’s own validations.

The Scheduled Times in the ASX Settlement Operating Rules indicate that the issuer (registry) will have at least one full business day to either accept or reject the Bank Account Notification (acct_013).

For further details refer to Investor Data Overview.

4.5.1 - Submitting Bank Account Details for CHESS Holdings

Participants can submit domestic or foreign bank account details for holdings they control on the CHESS subregister. Registries should record details from this CHESS message accurately and in a timely fashion.

Procedure

Step

Description

Step

Description

1

Participants receive holding details from a client and enters bank account details into a Bank Account Notification (acct_013) message for forwarding to the issuer (registry) via CHESS through the Bank Account Update/Delete Process.

2

The issuer (registry) upon acceptance of the bank account notification will update its internal records. Alternatively, the issuer (registry) may reject the bank account notification resultant from its own validation.

The registry passes a response back to CHESS within the Scheduled Time under the ASX Settlement Operating Rules.

4.6 - Issuer (Registry) Objection to Account (HIN) Registration Details

4.6.1 - CHESS Account (HIN) Details

When a participant creates a new account (HIN) on CHESS, the registration details are validated by CHESS and rejected if they do not pass the validation. However, it is possible to pass CHESS validation with registration details that do not meet issuer (registry) requirements.

Procedure

Step

Description

Step

Description

1

CHESS advises the issuer (registry) of the registration details when financial products are moved into a CHESS account (HIN) for the first time or when the registration details are changed (refer to section 4.7). The issuer (registry) contacts the controlling participant if the issuer (registry) standards are not met. The participant is expected to co-operate with the registry to standardise the details in a timely manner.

2

If an amendment to the registration details is required, the controlling participant initiates the Account and Holder Modification Process.

4.6.2 - Issuer Sponsored Holdings

Registries may compare name and address details when processing conversions or transfers from participant to issuer-sponsored holdings (refer to section 6).

If the converting CHESS account (HIN) has an existing issuer sponsored holding in the security and the CHESS account name does not match exactly, a registry may create a new holding irrespective of the security holder reference number (SRN) given.

If the converting CHESS account (HIN) has no existing issuer sponsored holding in the security, the registry will create a new holding with a new security holder reference number (SRN).

4.7 - CHESS Account (HIN) Modification

Participants submit changes to a CHESS account (HIN) details electronically. Participants must not under any circumstances instruct holders to forward written advices for change in account (HIN) details directly to ASXS. Participants are required to have and maintain documentation to verify that the requested change to account (HIN) details is correct and the participant is authorised to request the change.

When effecting changes to registration details, participants must consider whether the change results in a change in legal title or not. For changes that don’t result in a change in legal title, refer to section 4.7.3. For changes that do result in a change in legal title, refer to 4.4.4.

A sponsored CHESS account (HIN)'s registration details must always match those on the current sponsorship agreement.

4.7.1 - ASX Expectations Regarding Authority to Change Account (HIN) Details

Correspondence used as documentation to support a change to CHESS account (HIN) details must be signed by the holder of the financial products or by a person acting under a power of attorney from the holder.

Correspondence signed under a power of attorney should state that the signatory has received no notice of revocation of that power of attorney.

For corporations, correspondence should be authorised by one of the following:

  1. signed under company seal;

  2. signed by authorised officer(s) of the company; or

  3. signed by either two directors or a director and the company secretary.

Participants should have adequate procedures in place to confirm that correspondence requesting change to holder details are properly authorised by the holder. For example, they may compare the signature on the letter to the signature on the sponsorship agreement or validate an officer is authorised to sign the respective document on behalf of a company.

Participants must retain all supporting documentation for audit purposes.

Never send documentation for an address change to ASX Operations unless requested.

4.7.2 - Supporting Documentation Requirements

Participants that have initiated changes to holder registration details must have and maintain a written request from the holder that incorporates the holder’s true signature. Other supporting documentation may originate from a third party such as a marriage certificate, death certificate, the relevant prescribed Corporations Act form evidencing a change of company name or a deed poll evidencing an individual’s change of name.

Where a change of name arose out of a clerical error at the opening of an account, the supporting documentation maintained by a participant may include a written request from the holder and copy of the CHESS sponsorship agreement. Some third party documents showing continuity of name over the sponsorship period may also be required.

Where photocopied documents are relied upon as records, they should be appropriately certified by a person legally entitled (such as a Justice of the Peace or Solicitor) to certify a document as a true and correct copy of what it purports to be and must clearly identify the name and capacity of the certifier.

Participants must retain all supporting documentation for audit purposes.

On occasion changes are made to an account (HIN)’s registration details that do not constitute a change in legal title such as an account designation change or a change of name as a result of marriage. If the change of registration details constitutes a change in legal title for one or more holders, refer to section 4.7.4.

All modifications must comply with CHESS standards and validations. For further details on standards, validations and attributes that allow modifications, refer to Account and Holder Modification Overview.

CHESS also allows modification of attributes outside of the registration details.

Step

Description

Step

Description

1

The holder writes to the participant and provides supporting documentation where applicable, requesting modification to one or more of their registration details.

2

The participant verifies that the requested change does not include a change to legal title.

3

The participant initiates the Account and Holder Modification Process, sending an Account Modification Request (acct_003) to CHESS with the applicable account and/or holder details to be modified.

4

The participant retains the supporting documentation for audit purposes.

5

Where a registered address is changed, ASXS will send a notification to the new address of the participant sponsored holder as it is recorded in CHESS. Additionally, ASXS will send a notification to the previous registered address of the participant sponsored holder in a green-bordered envelope which cannot be re-directed: this ensures the holder is alerted to any unauthorised changes in their registered address.

When a change to the registration name results in a change of legal title, the registration details of the account (HIN) cannot be altered. Instead, a new sponsorship agreement and a new account (HIN) must be established and the financial products transferred from the former account (HIN) to the new account (HIN).

Participants should ensure that they obtain copies of all relevant supporting documentation evidencing these changes, including the deed of retirement and appointment (for changes of trustee) or other documents relating to the change for their records. The participant must be able to produce all relevant supporting documentation evidencing the change on request from ASXS for audit purposes.

The following are examples of changes to registration details that are considered by ASXS to be a significant change to legal title:

  • Changes of trustee - although in such cases there is no change of beneficial ownership, a change of trustee constitutes a change of legal title; and

  • Replacing accounts in the name of minors to the parent’s name.

These requirements regarding trustee names arise at general law and are not governed by the ASX Settlement Operating Rules, therefore it is not possible for ASXS to waive or vary any of these requirements.

Procedure

Step

Description

Step

Description

1

The holder writes to the participant requesting a change to their holder name. They should include documentation in support of the request.

2

The participant determines the requested name change constitutes a change of legal title.

3

The participant requests that their client submits an authorisation for the change of legal title, and obtains a new sponsorship agreement signed by the client under the new name.

4

The participant establishes a new account (HIN) in the new name of the client (refer to section 4.1). ASXS notifies the holder of their new account (HIN).

5

The participant transfers the relevant holdings from the former account (HIN) to the new account (HIN) (refer to section 7.2.1). ASXS issues CHESS holding statements for both accounts (HINs).

6

The participant retains the supporting documentation for audit purposes, together with the new client sponsorship agreement.

4.7.5 - Changing an Account (HIN)'s Type

Both participants and ASX Operations have the ability to modify the account type attribute.

The account type attribute can also be changed for locked accounts.

If the account (HIN) was created with an incorrect type, participants can initiate the Account and Holder Modification Process. The following account types can be modified:

  • Sponsored; and

  • Direct.

An account type change will not be accepted for settlement entrepot, accumulation entrepot and registration identifier accounts.

When modifying the account type of a direct account to a sponsored account, a communication preference is required if there was no preference provided previously for the direct account.

  • Sponsored to Direct account type change - notifications (only) will be generated.

  • Direct to Sponsored account type change - notifications and statements will be generated.

If a sponsored account was created with either a Holder type of individual or an ownership type of joint, it is not possible to modify the account type. Participants will be required to cancel the account and create a new account with the correct account type.

Participants must ensure that a CHESS Sponsorship Agreement has been executed for any account type changes from Direct to Sponsored.

Account type change is also available on request to ASX Operations. Once the account type is updated by ASX Operations:

  • an account notification (acct_002) will be generated and sent to the controlling participant and issuer (registry) (for each holding balance greater than zero); and

  • holding statements and notifications will be generated and sent based on the communication preference specified for an account identifier (HIN).

An account notification (acct_002) will not be sent to bid offeror or collateral manager because they are not notified of the account type and communication preference for the account notifications that they receive.

All modifications must comply with CHESS standards and validations. For further details on standards, validations and attributes that allow modifications, refer to Account and Holder Modification Overview.

4.8 - Change of Controlling Participant for a CHESS Account (HIN)

A CHESS account (HIN) is controlled by only one participant at any one time. As circumstances change, it may be necessary to change the participant that controls a CHESS account (HIN). Such circumstances include:

  • a sponsored holder requesting a change of controlling participant for all of their holdings;

  • a sponsored holder requesting a change of controlling participant for a portion of their holdings;

  • a merger of two or more participants into a new entity; or

  • the cessation of an existing participant (e.g. takeover, buyout, or liquidation).

CHESS provides three methods for effecting a change of the controlling participant for an account (HIN) or holding:

  • changing the controlling participant for one account (HIN);

  • changing the controlling participant for multiple accounts (HINs) (bulk movement); or

  • transferring a holding across participants.

A change of controlling participant for an account (HIN) does not result in a change of standing instructions applied to the account (HIN). Standing instructions may comprise:

  • TFN and ABN notifications;

  • bank accounts;

  • annual report elections; and

  • elections in respect of dividend plans (supported by dividend reinvestment plan enquiry).

A change of controlling participant cannot occur unless all validations and standards are met. For validations and a link to the ASX Proprietary Code Rejection List refer to Change of Controlling Participant Overview.

4.8.1 - Changing the Controlling Participant for One Account (HIN)

This functionality changes the controlling participant for an existing CHESS account (HIN) from one participant to another. This is used when an holder decides to change their controlling participant (e.g. Broker) for all holdings held under a particular account (HIN).

The new controlling participant must have a signed sponsorship agreement in place before the change of controlling participant request is submitted to CHESS.

Participants that are not accredited to process messaging related to the mFund service will not be able to receive an account (HIN) that holds mFund financial products until either:

  • The relinquishing participant transfers the mFund holding from the CHESS account (HIN) to the registry, or;

  • The requesting participant is technically accredited to process mFund messaging. 

Refer to Section 23 - mFund settlement service for further information.

Procedure

Step

Description

Step

Description

1

An holder makes arrangements to change their controlling participant. The new controlling participant ensures they have a sponsorship agreement in place for their new client.

2

The new controlling participant initiates the Change of Controlling Participant Process.

The Change of Controlling Participant Process identifies the messages CHESS will send should ASX Operations initiate this process.

3

The requesting participant may cancel the request prior to the existing controlling participant authorising the request or prior to the request being effected by CHESS through the Change of Controlling Participant - Cancellation Process .

4

The existing controlling participant must:

  1. verify the holder’s instructions;

  2. transfer any units in respect of outstanding sell transactions to its accumulation holding, pending settlement;

  3. transfer any units that the participant has a lien over to its nominee holding; and

  4. ensure all outstanding obligations (e.g. transfers and conversions) already initiated within CHESS by the relinquishing participant are completed.

5

If the request is rejected by the existing controlling participant, CHESS then processes the request per Change of Controlling Participant Process - Rejected. The requesting participant can make another change request once the reason for rejection has been resolved.

6

If the existing controlling participant is satisfied that control of the holder should be transferred to the requesting participant, the existing controlling participant authorises the request. CHESS then processes the request per Change of Controlling Participant Process - Accepted.

Where the existing controlling participant doesn’t authorise the change of controlling participant request within 10 business days, CHESS initiates Change of Controlling Participant - Cancellation Process .

7

The former controlling participant must update its records accordingly.

ASXS sends a notification directly to the holder advising them of the change of controlling participant.

8

The new controlling participant should verify its details for the holder client against the registration details provided by CHESS.

9

The new controlling participant must use the existing CHESS registration details for the account (HIN). Any changes to address details can be made using the CHESS Account (HIN) modification procedure (refer to section 4.7).

10

All standing instructions for the CHESS holdings held under the account (HIN) remain in place; there is no requirement for CHESS to resubmit them to the registry.

11

Current history for the account (HIN) is available only to the new controlling participant; previously archived history for the account (HIN) is available only to the former controlling participant.

4.8.2 - Changing the Controlling Participant for Multiple Accounts (HINs) (Bulk Movement)

This functionality changes the controlling participant for a number of CHESS accounts (HINs) from one participant to another. It may involve all accounts (HINs) for a participant (e.g. two brokers merging) or only a portion of accounts (HINs) (e.g. an adviser moving their clients to a different broker).

ASXS requests that participants hold preliminary discussions with them before requesting bulk movements.

Participants that are not accredited to process messaging related to the mFund service will not be able to receive an account (HIN) that holds mFund service financial products until either:

  • The relinquishing participant transfers the mFund holding from the CHESS account (HIN) to the registry, or;

  • The requesting participant is technically accredited to process mFund messaging. 

Refer to Section 23 - mFund settlement service for further information.

Procedure

Step

Description

Step

Description

1

The new controlling participant determines the list of holdings to be moved. These details may be obtained from the relinquishing participant or from each affected holder.

2

The new controlling participant establishes sponsorship agreements for each holder.

3

The new controlling participant completes a request form, which identifies the holdings to be moved in the existing account (HIN) and full holder name(s).

The new controlling participant attaches to the request form a positive undertaking signed by an authorised officer that confirms they have a sponsorship agreement for each holder nominated on the form.

The new controlling participant sends the completed form and attachment to the relinquishing Participant for authorisation.

If the bulk movement involves some but not all of the accounts (HINs) controlled by the relinquishing participant, the participant should include an Excel spreadsheet listing the accounts (HINs) that are to be transferred.

The new controlling participant retains a copy of the form for their records.

4

On the date specified on a Change of Sponsor request from the holder, the relinquishing participant must:

  1. validate the existing account (HIN) and full holder name details supplied by the new controlling participant on the Change of Controlling Participant form (Appendix H);

  2. authorise the change by signing, dating and stamping the form; and

  3. lodge the completed form with ASX Operations for processing.

    If the bulk movement involves some but not all of the accounts (HINs) controlled by the relinquishing participant, the participant should send ASX Operations a spreadsheet of the accounts (HINs) to be moved. The spreadsheet should meet the following data requirements:

    1. account identifier (HIN) (no registration details);

    2. the account identifier (HIN) must be 10 characters long, prefixing zeros to the front of the account (HIN) if necessary; and

    3. all account identifiers (HINs) must be in one column.

5

Prior to requesting a change of controlling participant, the relinquishing participant should transfer any units in respect of outstanding sell transactions to a nominated account (HIN) pending settlement.

6

ASX Operations executes the transfer. For each account (HIN) that is successfully transferred, CHESS will notify the existing controlling participant and new controlling participant per Change of Controlling Participant Process - Accepted.

7

ASXS notifies the holder that their controlling participant has been changed.

8

Following the change of controlling participant, if the relinquishing participant has an outstanding purchase transaction the relinquishing Participant should contact the new controlling participant to agree a method of delivery of the “bought” Financial products to the client’s holding, e.g. by Bilateral Demand Transfers or Bilateral Settlement Instructions (refer to section 7).

4.8.3 - Transferring a Holding across Participants

This functionality allows for the transfer of units from one holding under the control of one participant to another holding under the control of a different participant.

This procedure should be used only if a portion of all holdings under an account (HIN) is to be transferred to the new participant. If all holdings are to be transferred under an account (HIN) are to be transferred, use the procedures in section 4.8.1 or 4.8.2.

Procedure

Step

Description

Step

Description

1

Where the holder is not a client of the new controlling participant, the participant must establish a sponsorship agreement with them and create an account (HIN) (refer to section 4.1) before arranging the transfer of the holdings.

2

The new controlling participant arranges the transfer of units with the existing controlling participant. The transfer is effected through the use of the bilateral demand transfer transfer functionality (refer to section 7).

3

The new controlling participant should advise the holder that all standing instructions previously advised to the registry in respect of the transferred holdings have been cancelled and they should lodge new standing instructions.

4.8.4 - Controlling Participant Enquiries

The controlling participant enquiry functionality allows a participant to obtain the controlling participant, account status and locked reason (where applicable).

Participants contacting ASX Operations directly will be asked to request the details via the controlling participant enquiry functionality.

Refer to Change of Controlling Participant Overview for further details.

Procedure

Step

Description

Step

Description

1

The participant initiates the Controlling Participant Enquiry.

4.9 - Account and Holder Locking

Account and holder locks can be applied by both the participant and ASX Operations (where the request has been directed to ASX Operations), and must be supported by appropriate documentation.

Locks are applied at both account and holder level with the exception of investigation (non-specific) and court order reasons, these locks are applied at the account level.

Where an account and holder lock has previously been removed, further requests to lock the account and holder can be managed by the participant and must be supported by the appropriate documentation.

Participants or ASX Operations may need to prevent certain transactions from being applied to all holdings for a nominated account (HIN). This is facilitated by an account (HIN) and holder lock. Circumstances where this may occur include:

  • to protect the holdings of a deceased estate until probate is granted following the notification of death (refer to section 4.9.1);

  • when the holder(s) declare bankruptcy (refer to section 4.9.4); or

  • for other reasons such as when instructed by a court order or such other non-specified purpose (e.g. internal investigation) (refer to section 4.9.7 and 4.9.8).

When an account is locked, CHESS prevents:

  • transfers or conversions from CHESS holdings;

  • acceptance of an off-market buyback, off-market takeover or reinvestment offer (OTHR event type);

  • withdrawal of an acceptance of an off-market buyback, off-market takeover or Other event type;

  • issuer (registry) movements that result in a decrease to a security balance (with the exception of a reconstruction or in the event an account is locked as a result of death or bankruptcy); and

  • bidder initiated transfers.

Refer to Holding Adjustments Overview for further information.

CHESS does not prevent:

  • participant transfers and conversions into holdings;

  • name and address changes;

  • the lodgement of Tax File Number (TFN) notifications; and

  • the lodgement (or cancellation) of bank account information.

Where ASX Operations applies an account (HIN) lock, a date for the lock to be removed can be included in the message where the lock reason is not due to deceased or bankrupt holder(s). A participant can request this by providing a written notice with supporting documentation to ASX Operations specifying the relevant time period.

Refer to Account and Holder Locking and Unlocking Overview for further details. For holding administration locks (or holding locks) refer to section 5.

4.9.1 - Notification of a Deceased Holder

When a participant is advised of the death of a holder, the participant verifies that the documentation provided to them is sufficient to enable them to apply an account (HIN) lock; the holder is also locked. It is up to participants to determine what specific supporting documentation they accept as sufficient evidence of this.

As a result of the death, a legal representative of the deceased is usually appointed.

The legal representative acts on behalf of the estate for a period of time (normally three months, but which may be up to 12 months by agreement between the participant and the legal representative) during which holdings are disposed through trades and transfers.

If the participant does not need to move any units required to settle outstanding legitimate obligations, or does not immediately convert the holdings to issuer sponsored, an account (HIN) lock must be placed on the account (HIN) within 1 business day of the participant receiving notification of death.

For any outstanding buy transactions authorised by the deceased, the participant transfers the units to the deceased’s holding when the transactions are settled. The deceased’s estate is required to settle any outstanding funds for the transactions.

Refer to sections 4.9.2 and 4.9.3 and Account and Holder Locking and Unlocking Overview for further details.

4.9.2 - Death of an Individual Holder

This section applies to a death where there is only one holder of an account (HIN). This section does not refer to death of joint holders of an account (HIN) (see section 4.9.3 for death of a joint holder).

The participant should seek instructions from the legal representative to determine whether all holdings should be converted to issuer sponsored subregister or maintained as CHESS holdings. If the instruction is to convert, follow the procedure described in section 4.11.1.

The ASX Settlement Operating Rules deem the sponsorship agreement between a holder and a participant to remain in operation after the death of the holder, for a period of up to three months after the removal of the holder record lock. The purpose is to allow time for the legal representative to dispose of the estate. This period may be extended by agreement between the participant and the legal representative up to 12 months after the unlocking of an account (HIN).

4.9.3 - Death of a Joint Holder

When a joint holder dies, the surviving joint holder(s) are entitled to the deceased’s portion of those joint holdings, as specified in the ASX Settlement Operating Rules.

The sponsorship agreement between joint holders and a participant is not terminated on the death of one of the joint holders. The sponsorship agreement remains in operation in respect of the surviving joint holders. It should be updated to include the new account (HIN) established for the surviving holders, and to note the death of the deceased holder.

Where a participant places a deceased lock on a joint holder, the account (HIN) will be automatically locked. It is not mandatory to place a deceased lock on a joint holder when there is a surviving holder.

Where all holders of a joint account (HIN) are deceased and has holdings, a deceased account (HIN) lock is required.

4.9.4 - Notification of a Bankrupt Holder

There are two situations where an account (HIN) lock may be applied before a sequestration order declaring a bankrupt holder is made:

  1. the court issues an order providing for the seizure of property of the debtor, for example where a holder has absconded or is about to abscond, with a view to avoiding the payment of their debts; or

  2. the court issues an order providing for the interim control of holder’s estate before sequestration.

In the event of bankruptcy of a holder, the trustee of the holder’s estate may elect to remove the relevant financial products from the CHESS subregister.

Refer to sections 4.9.5 and 4.9.6 and Account and Holder Locking and Unlocking Overview for further details.

4.9.5 - Bankruptcy of an Individual Holder

Where an individual holder is declared bankrupt, and the trustee instructs the participant to retain holdings on the CHESS subregister, the sponsorship agreement with the bankrupt continues. The trustee in bankruptcy assumes control of the sponsorship agreement until the bankruptcy is annulled or the assets are disposed. If all assets are disposed, the participant must terminate the sponsorship agreement and must cancel the bankrupt’s account (HIN) (refer to section 4.12).

4.9.6 - Bankruptcy of a Joint Holder

Where a joint holder is declared bankrupt, and the trustee instructs the participant to retain holdings on the CHESS subregister, the trustee enters into a new sponsorship agreement with the participant on behalf of the bankrupt. The original joint holder’s sponsorship agreement remains in operation in favour of the remaining joint holders after the declaration that a joint holder is bankrupt. The remaining joint holders may renegotiate the sponsorship agreement and change standing instructions.

For bankrupt joint holder(s) the below actions are available dependent on the specific circumstances of the bankrupt:

  • The participant establishes a new sponsorship agreement with the trustee in bankruptcy and creates a new account (HIN) (refer to section 4.1).

  • The participant establishes a new sponsorship agreement with the remaining holders and creates a new account (HIN) (refer to section 4.1).

  • The participant divides equally all available financial products between the bankrupts and the remaining joint holders.

  • The participant moves the bankrupt joint holder’s available portion of holdings into the bankrupt’s holding.

  • The participant moves the remaining joint holders available portion of holdings into their new holding.

  • The participant cancels the joint account (HIN) (refer to section 4.12).

Holding subpositions created by the acceptance of an off-market takeover bid or a buyback offer through CHESS are not available for division between the bankrupt joint holder and the remaining joint holders.

4.9.7 - Court Order

As a result of a court order in relation to a person, or for other reasons (e.g. where assets are required to be frozen at law), a participant or ASX Operations may restrict participant transactions from being applied to the nominated person’s holdings that reside on the CHESS subregister.

Refer to Account and Holder Locking and Unlocking Overview for further details.

4.9.8 - Non-specific

There are circumstances where an account needs to be locked by the controlling participant for a non-specified reason. For example, if the account (HIN) is under investigation for a specific reason. The account (HIN) can be locked, and after the investigation is complete, may be unlocked and if necessary re-locked with an appropriate code.

4.9.9 - Processing an Account and Holder Lock

This procedure applies generally across the locking concepts covered in this section. For conversions refer to section 4.11, for holding administration locks (or holding locks) refer to section 5.

Procedure

Step

Description

Step

Description

1

The participant receives a request to apply an account (HIN) Lock, this may be as a result of:

  • death of a holder;

  • bankruptcy;

  • non-specific reason; or

  • court order.

Account and holder locks can be applied by both the participant and ASX Operations (where the request has been directed to ASX Operations).

2

The participant initiates the Account and Holder Locking and Unlocking Process with the appropriate Account Status Update Reason or Holder Status Update Reason.

The Account and Holder Locking and Unlocking Process identifies the messages CHESS will send should ASX Operations initiate this process.

Where a holding lock is to be applied and there is a subposition, the subposition may need to be removed.

3

If an account (HIN) lock is being applied, for any outstanding sell transactions, the participant transfers units from the holding to the participant’s accumulation or settlement account (HIN) in preparation for the pending settlement.

4

If required, when a participant is satisfied that the documentation received is in order, the participant establishes a new account (HIN) (refer to section 4.1).

The participant then uses a bilateral demand transfer (refer to section 7) to transfer the relevant holdings to the new account (HIN). These transfers are Off-Market.

Standing instructions from original holdings do not apply to the new holdings.

5

The participant cancels the account (HIN) if necessary (refer to section 4.12).

6

For any outstanding buy transactions settled after the death of the joint holder, the participant transfers the units to the new surviving joint holder’s holding when the transactions are settled. The deceased’s estate is required to settle any outstanding funds for the transactions.

For any outstanding buy transactions settled after the application of the record lock - notification of bankruptcy, the participant should liaise with the trustee in bankruptcy. The participant transfers the units into the bankrupt’s holding only after payment is received.

For any outstanding transactions where ASX Operations has applied the lock, the participant should contact ASX Operations.

Once an account (HIN) is locked due to court order, further operations on the holding are co-ordinated by ASX operations or the participant (dependent on who applied the lock) after consultation between the participant, the issuer (registry), and any third party involved.

7

The participant notifies any current events, including corporate actions which impact the holdings of the account (HIN).

4.10 - Account and Holder Unlocking

Account and holder unlocks can be applied by both the participant and ASX Operations (where the request has been directed to ASX Operations), and must be supported by appropriate documentation.

Unlocking is applied at both account and holder level with the exception of investigation (non-specific) and court order reasons, these are applied at the account level.

Locks performed in error may be unlocked by the party that performed the lock.

Where an account and holder lock has previously been removed, further requests to lock the account and holder can be managed by the participant and must be supported by the appropriate documentation.

ASX Operations have the ability to unlock an account that was previously locked by a participant, regardless of the lock reason. Appropriate documentation to support this request is required by ASX Operations.

4.10.1 Death of a Holder

When a participant is satisfied that the deceased’s legal representative may dispose of the estate, the account (HIN) may be unlocked. Ordinarily, this will be when probate or letters of administration have been granted and the executor or administrator presents satisfactory evidence of this to the participant.

It is up to participants to determine what specific supporting documentation they accept as sufficient evidence of this. Participants will only need to provide ASXS with documentation supporting a request to unlock an account (HIN) when ASXS specifically makes a request to sight such documentation. ASX monitors whether or not participants are meeting these obligations by conducting random audits.

When the deceased's account (HIN) has nil holdings, the participant may consider cancelling the account (HIN) (refer to section 4.12). It is not mandatory to unlock an account that has nil holdings prior to cancelling the account.

No new holdings can be placed on the account (HIN) nor can the account (HIN) be utilised in any way once the deceased holdings have been removed.

Refer to Account and Holder Locking and Unlocking Overview for further details.

4.10.2 - Bankruptcy of a Holder

A bankruptcy holder record lock can be unlocked when:

  • the bankruptcy is annulled; or.

  • the trustee in bankruptcy is in a position to sell the bankrupt’s assets and distribute the proceeds to the creditors.

Participants are required to retain all supporting documentation. ASXS may request to view this documentation where necessary.

The request may be in any form acceptable to the participant, however the participant should request the trustee to provide a letter on the trustee’s letterhead.

For accounts notified as bankrupt with nil holdings, it’s not mandatory to unlock the account prior to cancelling the account.

Refer to Account and Holder Locking and Unlocking Overview for further details.

4.10.3 - Court Order

An account (HIN) lock resulting from a court order can be unlocked when appropriate documentation has been received by the participant or ASX Operations (as applicable). The appropriate documentation to support a request to remove a court order may be in any form acceptable to the participant.

Participants are required to retain all supporting documentation. ASXS may request to view this documentation where necessary.

Refer to Account and Holder Locking and Unlocking Overview for further details.

4.10.4 - Processing an Account and Holder Unlock

This procedure applies generally across the locking concepts covered in this section.

Procedure

Step

Description

Step

Description

1

The participant ensures they have supporting documentation authorising the removal of the account (HIN) lock, as per their internal policy and procedures.

2

The participant initiates the Account and Holder Locking and Unlocking Process with the appropriate Account Status Update Reason or Holder Status Update Reason.

The Account and Holder Locking and Unlocking Process identifies the messages CHESS will send should ASX Operations initiate this process.

3

The participant follows their internal procedure to advise the holder of the unlock. If the request is valid, ASXS sends a notification of the unlock to the holder’s address.

4

The participant retains the supporting documentation for audit purposes.

5

Where the unlock request relates to the bankruptcy of a holder, when the account (HIN) is unlocked and the disposal of assets or the removal of the assets from the CHESS subregister is completed, the participant cancels the bankrupt’s account (HIN) (refer to section 4.12).

4.11 Account and Holder Locking/Unlocking - Subregister Conversions

4.11.1 Conversions due to Death

The deceased’s legal representative may elect to remove the deceased’s holdings from the CHESS subregister to the issuer sponsored subregister.

The request by the legal representative to remove all holdings from the CHESS subregister terminates the sponsorship agreement between the participant and the legal representative. After conversion to an issuer sponsored holding, the legal representative deals directly with the registry to dispose of the holdings or to transfer them to the beneficiaries.

4.11.2 Conversions due to Bankruptcy

The trustee may elect to remove the bankrupt’s holdings from the CHESS subregister. The participant initiates conversion of the financial products to an issuer sponsored holding.

The election by the trustee to remove all holdings from the CHESS subregister terminates the sponsorship agreement between the participant and the trustee. After conversion to an issuer sponsored holding, the trustee deals directly with the registry to dispose holdings of the bankrupt.

4.11.3 - Processing a Subregister Conversion due to a Death or Bankruptcy

This procedure applies generally across the locking concepts covered in this section.

Procedure

Step

Description

Step

Description

1

The participant receives an instruction to convert holdings from the CHESS subregister, and follows their internal procedures to verify the instructions received are valid.

2

The participant verifies if an account (HIN) lock has been applied. If the account (HIN) has been locked refer to section 4.10.4 to unlock the account (HIN).

3

Once the lock has been released, the participant initiates the Participant to Issuer Sponsored Conversion Process.

4

Where the unlock request relates to the bankruptcy of a holder, the participant cancels the account (HIN) if required (refer to section 4.12).

4.12 - Cancellation of Accounts (HINs)

Participants may cancel accounts (HINs) that are no longer required. This functionality may be used if a sponsorship agreement has ceased or if an account (HIN) has been established incorrectly.

Where financial products are removed from an account (HIN) prior to cancellation, a one-day lapse must occur before the account (HIN) can be cancelled.

ASXS recommends participants perform periodic reviews and housekeeping of unused accounts (HINs). It is the responsibility of participants to ensure that unused accounts (HINs) are not maintained on the system.

If for some reason a participant can no longer access CHESS and accounts (HINs) need to be cancelled, ASX Operations can remove the accounts (HINs). The participant should contact ASX Operations. Participants will be charged for the service.

Participants should note that once an account (HIN) has been cancelled from CHESS it cannot be re-used. The cancellation cannot be reversed.

Refer to Account Cancellation Overview for further details.

Procedure

Step

Description

Step

Description

1

The participant initiates the Account Cancellation Process.

The Account Cancellation Process identifies the messages CHESS will send should ASX Operations initiate this process.

The participant or ASX Operations may initiate the Remove Pending Account Cancellation Process to remove a pending account (HIN) cancellation.

2

ASXS notifies the holder of the cancellation.