ASX needs to bolster tech before shortening trade settlement, experts say
The exchange considered shorter trading settlements in 2024 but plans were put on hold
The Australian Securities Exchange (ASX) is considering a move to shorten trade settlement times, but experts warn that it should proceed with caution due to past technology issues. The exchange currently operates a T+2 system, where trades take up to three days to settle, whereas major global counterparts such as the US, Hong Kong, London, and many European markets have adopted T+1 systems.
ASX CEO Anthony Attia expressed eagerness to introduce T+1 settlements in Australia, which could bring the exchange in line with global standards and attract foreign interest. However, the ASX has faced a series of technology glitches and market disruptions in recent years, leading to regulatory fines and a reprimand. Katrina Horrobin, CEO of the Governance Institute of Australia, urged the ASX to balance the speed of implementation with careful testing and stakeholder consultation to ensure market participants' confidence in the transition.
ASX Chair David Clarke stated that the company has reached a turning point in addressing its regulatory troubles, noting that the first stage of the new clearing and settlement system (CHESS 1) is underway, which could enable the introduction of T+1 settlements. Blake Briggs, CEO of the Financial Services Council, emphasized the importance of aligning Australia's equity markets with global standards and encouraged the ASX to prioritize this move along with necessary investments and industry consultation.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
