Mandala’s report found “big bang” approaches are not needed and regulation can be calibrated to lift requirements on clearing and settlement competitors as they get bigger, an approach that could force ASX to move faster as it considers the new design for CHESS.
The report also concludes competition can reduce fees for clearing and settlement, a service that makes ASX $150 million a year. Competition has driven down clearing and settlement fees last year in Europe by 25 per cent, the UK by 27 per cent, and the US by 55 per cent, while ASX fees have remained flat. In contrast, in equities trading – where ASX faces competition from CBOE – ASX reduced trading fees to 0.15 per cent from 0.28 per cent just before its competitor entered the market.
In the US, the Depository Trust and Clearing Corporation’s Project Ion introduced a DLT-based settlement platform that supports T+0 trading, processing up to 160,000 transaction per day.