Activity

The Australian Securities Exchange (ASX) has announced a new pricing policy for its cash equities clearing, settlement, and issuer services (CS services), with a strong focus on enhancing transparency for the market. This policy, which is set to be finalized and take effect from July 1, 2025, follows a comprehensive consultation process that began in 2024.
A key element of the new policy is the introduction of the Building Block Method (BBM). This regulatory pricing model, commonly used in essential infrastructure sectors, calculates a maximum allowable revenue for providing CS services. This means that charges will be based on efficient costs and a fair return on capital, aiming to align pricing with the actual costs and risks of service delivery.
Key aspects of the new policy and its transparency enhancements include:
* Annual Pricing Reviews and Independent Assurance: The policy mandates annual pricing reviews and independent assurance processes to verify costs and returns. This is designed to ensure that the ASX is recovering no more than the efficient costs of providing these services.
* Addressing Excess Revenue: Any excess revenue generated will be addressed through mechanisms such as rebates, fee reductions, or targeted reinvestment into core systems and services.
* Fee Review Triggers and Consultation: Changes to CS services fee levels will only occur in response to specific fee review triggers, such as when annual CS revenues are 10% above or below the required revenue, and after detailed consultation with customers and stakeholders. The earliest a change could be made to fee levels under the new model is July 1, 2027, subject to defined exceptions.
* Five-Year Policy Review: The entire policy will undergo a review every five years, ensuring its continued relevance and effectiveness.
* Price Stability and Predictability: The ASX aims to provide customers with price stability and predictability, with no immediate material changes to pricing expected upon the policy’s commencement.
This new policy builds upon ASX’s existing commitments to transparent and non-discriminatory pricing, as outlined in its Cash Equities Clearing and Settlement Code of Practice. It aims to provide greater assurance to users that they are paying no more than necessary for essential CS services.

Video courtesy of Eurex

Video courtesy of Eurex