Section 06 - Transfers and conversions between subregisters

Section 06 - Transfers and conversions between subregisters

6.1 - Securityholder Reference Number (SRN) and Holding Balance Enquiry

Securityholder Reference Numbers (SRN's) are an important security measure for holders holding financial products on the issuer sponsored subregister. Participants must exercise extreme care when using this confidential reference number.

A participant can obtain an SRN or an SRN holding balance on behalf of a holder from the registry using the electronic SRN enquiry facility.

Refer to SRN Enquiry Overview for further details.

CHESS provides basic validation of issuer sponsored enquiry message contents. The matching of details and retrieval of data is performed by the Issuer/Registry.

It is the responsibility of each participant to ensure that their procedures and usage of the CHESS issuer sponsored enquiry facility is in accordance with the obligations of the ASX Settlement Operating Rules.

Procedure

Step

Description

Step

Description

1

The participant initiates the SRN Enquiry Process.

6.2 - Registration Identifier (RGID)

RGID stands for “Registration Id”. The RGID is a temporary static data object that is created by the CSP and resides on CHESS. The unique 15 character identifier is required for transfers and SRN enquiry processing and is not required for a conversion request. The purpose of the RGID is to identify the correct issuer sponsored holding involved in the movement of financial products between subregisters. The RGID contains registration details of financial products that are not held on the CHESS subregister but are being moved between the issuer sponsored subregister and the CHESS subregister in preparation of some type of transaction, e.g. sale transfer. When an RGID is created, it requires the foreign residency indicator to be “domestic”, “foreign”, “mixed” or “unknown”.

The RGID is also used in the SRN enquiry workflow for the same purpose, to identify financial products that are being held on the issuer sponsored subregister which are the subject of the enquiry.

Once created the RGID is only valid as long as there are pending transactions that reference it. The RGID is cancelled through the Registration Identifier (RGID) Housekeeping Process. This means that during its life the RGID can be utilised to perform one or many transfers or SRN enquiries with matching registration details, from any issuer sponsored subregister.

Refer to Registration Identifier (RGID) Housekeeping Overview for further details.

6.3 - Conversion Concepts

This section describes procedures for moving holdings between the CHESS subregister and the issuer sponsored subregister.

There can be no change in registration name or address during a CHESS conversion process. 

CHESS does not effect subregister movement requests while it is processing the daily settlement run.  During this period, CHESS queues any conversion requests it receives for processing after settlement.


6.3.1 - Warranties

Under ASX Settlement Operating Rules, participants are required to warrant they have the necessary holder authority for effecting an issuer sponsored to participant conversion.


6.3.2 - Carrying Forward of Standing Instructions

Standing instructions may comprise:  

  • tax file number (TFN) and Australian business number (ABN) notifications; 

  • bank account; 

  • annual report elections; and  

  • elections in respect of dividend plans. 

Issuers will continue to carry forward standing instructions in relation to a holding that has been converted except in the following circumstances: 

  • if the conversion results in the financial products going to an existing holding where standing instructions are already recorded; or 

  • if an election for any part of that holding has been made in respect of a dividend plan (note that the instructions are carried forward if the holder fully participates in one plan.  The instructions are not carried forward where the holder only partially participates in a plan or is in more than one plan); or 

  • the issuer offers more than one dividend plan and an election for any part of that holding has been made in respect of one or more of those plans.  Refer to Dividend Reinvestment Plan and Bonus Share Plan Elections Overview for further details.

Details on when standing instructions will be successfully carried forward as well as the exceptions to this are summarised as follows:

Converting from

Converting to

Scenario

Standing instruction carried forward

CHESS Holding

Issuer Sponsored Holding

Existing Issuer Sponsored Holding where standing instructions are already recorded.

No

Issuer Sponsored Holding

CHESS Holding

Existing CHESS Holding where standing instructions are already recorded.

No

CHESS Holding

Issuer sponsored Holding

Existing Issuer sponsored Holding where no standing instructions are already recorded.

Yes

Issuer Sponsored Holding

CHESS Holding

Existing CHESS Holding where no standing instructions are already recorded.

Yes

CHESS Holding

Issuer sponsored Holding

If an election has been made for full (100%) participation in a dividend plan for the CHESS Holding.

Yes

Issuer sponsored Holding

CHESS Holdings

If an election has been made for full (100%) participation in a dividend plan for the Issuer Sponsored Holding.

Yes

CHESS Holding

Issuer sponsored Holding

If an election has been made for partial participation in a dividend plan for the CHESS Holding.

No

Issuer Sponsored Holding

CHESS Holding

If an election has been made for partial participation in a dividend plan for the Issuer Sponsored Holding.

No

CHESS Holding

Issuer sponsored Holding

If the issuer offers more than one dividend plan and an election has been made for partial participation in one or more of those plans for the CHESS Holding.

No

Issuer Sponsored Holding

CHESS Holding

If the issuer offers more than one dividend plan and an election has been made for partial participation in one or more of those plans for the Issuer Sponsored Holding.

No

These are ASXS’s minimum requirements for the carrying forward of standing orders. Issuers may introduce further requirements, especially in the case of holdings that are covered by multiple dividends. 

6.4 - Issuer Sponsored to Participant Conversion

Foreign Ownership Restrictions

If the conversion involves financial product subject to CHESS foreign ownership restrictions (refer to section 2.1.11) and the holder requires the conversion to preserve the “confirmed foreign” status, the participant should mark the conversion message accordingly. For financial product to remain as “confirmed foreign” after conversion, the source HIN and the target holding must be designated as foreign (refer to section 2.1.11). All CHESS validations will be identical to those used for foreign-to-foreign transfers (refer to section 7.1.5).

The conversion will not be effected on the CHESS subregister until it has been authorised by the registry. 

Refer to Transfers and Conversions Overview for further details.

Procedure

Step

Description

Step

Description

1

The participant receives instructions from a client to convert financial products from an issuer sponsored subregister. The participant should obtain their Securityholder Reference Number (SRN) from the client for inclusion in the conversion request. If the SRN is not available, a Participant may verify it via the SRN enquiry (refer to section 6.1).

2

The participant initiates the Issuer Sponsored to Participant Conversion Process.

The participant can only initiate a transfer where the subregister is open. The issuer (registry) may authorise transfers where the subregister is either open, suspended or closed (refer to sections 10.5 and 10.6).

3

The participant sends a conversion request to CHESS. If the conversion is designated with a basis of quotation that is different from the current default basis of quotation for the financial product, the participant should apply an override basis of movement on the conversion.

4

If the registry authorises the conversion, CHESS updates the target holding on the CHESS subregister and notifies the participant that conversion has been effected. If the registry rejects the conversion, CHESS notifies the participant. When communicating with the registry, the participant should use the value from the Registry Reference field in the rejection message.

5

The registry must carry forward any standing instructions existing for the issuer sponsored holding to the converted holding (refer to 6.3.2 for exceptions) .

6

The participant internally processes the conversion to completion and verifies the closing balance of the account.

 

6.5 - Participant to Issuer Sponsored Conversions  

Foreign Ownership Restrictions

If the conversion involves financial product subject to CHESS foreign ownership restrictions (refer to section 2.1.11) and the holder requires the conversion to preserve the “confirmed foreign” status, the participant should mark the conversion message accordingly. For financial product to remain as “confirmed foreign” after conversion, the source HIN and the target holding must be designated as foreign (refer to section 2.1.11). All CHESS validations will be identical to those used for foreign-to-foreign transfers (refer to section 7.1.5).

No change of registration name or address can occur with a conversion. If an existing holding on the issuer sponsored subregister is referenced, and the registration details advised in the conversion request do not match the registration details of the nominated holding, the registry will likely create a new holding as a result of the conversion.

For holdings converted to the issuer sponsored subregister, a CHESS statement is produced showing the balance of the holding on the CHESS subregister reduced by the amount of the conversion.

ASX operations can assist participants in converting:

  • All account (HIN)s controlled by a participant to issuer sponsored sub-register;

  • All holdings in an account (HIN) to the issuer sponsored sub-register; and

  • All holdings of a security to the issuer sponsored sub-register.

Please contact to discuss.

Procedure

Step

Description

Step

Description

1

The participant receives instructions from a client to convert financial products from CHESS to the issuer sponsored subregister.

2

The participant initiates the Participant to Issuer Sponsored Conversion Process.
If the conversion is designated with a basis of quotation that is different from the current default basis of quotation for the financial product, the participant should apply an override basis of movement on the conversion.

The participant can only initiate a conversion where the subregister is open.

ASX Operations can initiate a conversion where the subregister is open or suspended (refer to section 10.5).

3

CHESS sends the conversion request to the relevant registry, which includes the registration details from the CHESS source holding.
If the conversion request specifies an issuer’s security holder reference number (SRN) and there is any discrepancy between the registry’s registration name and address as it is recorded on the Issuer’s register and the conversion request, the registry may create a new holding referencing those details on the conversion request.

4

The registry notifies the issuer sponsored holder of the conversion transaction by way of a holding statement.

6.6 - Transfers between subregisters

Refer to Transfers and Conversions Overview for further information on transfers between subregisters.

Foreign to foreign allocations

Foreign to foreign allocations should be marked accordingly (refer to section 7.1.5)

6.6.1 - Warranties

Under ASX Settlement Operating Rules, participants are required to:

  • warrant they have the necessary holder authority for effecting a transfer of financial products; and

  • indemnify ASXS and/or issuers against losses incurred as a result of unauthorised transfers instructed by participants via ASXS.

The Corporations Regulations also contain statutory warranties and indemnities in relation to the transfer of financial products (including where such transfer is unauthorised).

6.6.2 - Issuer Sponsored to Participant Transfer

Refer to the Transfers between Subregisters and Issuer to Participant section of Transfers and Conversions Overviewfor further details on issuer sponsored to participant transfer

Procedure

For an issuer sponsored to participant transfer; the holding is moved from an existing issuer sponsored account by providing an SRN in the request, into a Participant controlled account by providing a HIN in the request. Registration details will be provided and matched by the issuer (registry) to confirm the correct delivering account.

Step

Description

Step

Description

1

The participant receives instructions from a client to transfer financial products from an account on the issuer sponsored subregister to an account (HIN) on the CHESS subregister. The participant should obtain the Securityholder Reference Number (SRN) from the account on the issuer sponsored subregister for inclusion in the transfer request. If the SRN is not available, a Participant may verify it via the SRN Enquiry (refer to section 6.1).

Where the transfer documentation is supplied to the participant by a person other than the noted transferor, the participant should obtain authorisation from the transferor before effecting the transfer.

2

The participant initiates the Issuer Sponsored to Participant Transfer Process.

The participant can only initiate a transfer where the subregister is open. The issuer (registry) may authorise transfers where the subregister is either open, suspended or closed (refer to sections 10.5 and 10.6).

3

If the transfer is authorised by the issuer (registry), CHESS updates the holding on the CHESS subregister and notifies the participant that the transfer has been effected.

4

If the transfer is rejected by the issuer (registry) CHESS notifies the participant.
The participant must take remedial action outside of CHESS to investigate and resolve the issue before resubmitting, refer to step 2.
The participant should use the Registry Reference field carried in the CHESS message as a cross‐reference when communicating directly with the issuer (registry).

5

The participant internally processes the transfer to completion.

 

6.6.3 - Participant to Issuer Sponsored Transfer

Refer to the Transfers between Subregisters and Participant to Issuer Sponsored Transfer section of Transfers and Conversions Overview for further details on Participant to Issuer Sponsored Transfers.

Procedure

Step

Description

Step

Description

1

The participant receives instructions from a client to transfer financial products from an account (HIN) on the CHESS subregister to an account on the issuer sponsored subregister.

Where the transferee is an existing holder on the issuer sponsored subregister the participant should obtain the Securityholder Reference Number (SRN) for the account on the issuer sponsored subregister for inclusion in the transfer request. If the SRN is not available, a Participant may verify it via the SRN Enquiry (refer to section 6.1).

2

The Participant initiates the Participant to Issuer Sponsored Transfer Process.

The participant can only initiate a transfer where the subregister is open.

3

The participant internally processes the transfer to completion.

4

The receiving registry updates an existing issuer sponsored transferee holding or establishes a new issuer sponsored holding as required. If the holder does not already have an issuer sponsored holding then a new issuer sponsored holding is established with the new registration details.

5

If the transfer is rejected by the issuer (registry) CHESS notifies the participant.

The participant must take verification action outside of CHESS to investigate and correct the problem, before resubmitting the transfer request, refer to step 2.

The participant should use the Registry Reference field carried in the CHESS message as a cross‐reference when communicating externally with the issuer (registry).

The financial products in question are deemed to be part of the issuer sponsored subregister pending resolution of the registration details.

6.7 - Conversion Requests Approaching Record Date

During the ex period Participants may nominate movements onto the CHESS subregister as ex or cum per the override basis of movement process; alternatively Participants may opt to use the CHESS Default Basis of Movement.

When participants submit cum transfers and conversions to registries just prior to or on the record date, registries may be compelled to process a cum transactions as ex. This is in the event that any supporting documentation required to process the transfer or conversion is not received by the registry by the end of day on the record date. 

CHESS notifies the participant of the basis of movement for transactions initiated in the ex period. Participants with cum transfers or conversions processed as ex can claim entitlements. Additional details on claims entitlements will be made available in a subsequent APG release. 

Participants can minimise the likelihood of such claims by submitting cum transactions and any applicable documentation in sufficient enough time to allow for the registry’s prescribed turnaround time (refer to the ASX Settlement Operating Rules).  

6.8 - Off Market Issuer Sponsored Transfers

Standard Transfer Forms are an instrument of transfer for off-market transactions where both the transferor and the transferee holding are outside CHESS.

6.9 - Movement Between Offshore and Australian Registers (Shunting) 

Shunting is the process of converting dual listed securities from a holding on a foreign market to a holding on the Australian market, or vice versa.

6.9.1 - Movement from a Foreign Register 

Dual listed securities held on a foreign register are converted to a holding on an Australian register.

Procedure

Step

Description

Step

Description

1

The holder sends the certificates and other necessary documents to the foreign registry.  The documentation should include an authority to either; issue a new certificate or issue the securities to the holders Account (HIN) or issuer sponsored account.

2

The foreign registry moves the holding to the Australian register.

3

The Australian registry creates a holding on either the CHESS or issuer sponsored subregister

6.9.2 - Movement to a Foreign Register 

Dual listed securities held on an Australian register are converted to a holding on a foreign register. 

Procedure

Step

Description

Step

Description

1

The participant sends a request to the registry, identifying the foreign registry or depository, providing all details required by the foreign registry/depository to facilitate the movement of the securities from the Australian to the foreign register. 

2

The Australian registry moves the holding to the designated foreign register.

3

The Australian registry adjusts the holding on the Australian registry. 

Refer to Holding Adjustments Overview for further details.

6.10 - CHESS Housekeeping For Unmatched Transactions

CHESS automatically removes unactioned transfer or conversion requests after three business days (day of receipt plus 2 business days) and notifies the affected participants and registries.

Procedure

Step

Description

Step

Description

1

If the the above criterion is satisfied, CHESS will initiate the appropriate housekeeping process:

 

 

 

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