CHESS Release Business and Technical Overview Client Segregation Enhancements to CHESS

Transcription

1 CHESS Release Business and Technical Overview Client Segregation Enhancements to CHESS

2 Table of Contents 1. OVERVIEW BACKGROUND PHASE PHASE Corporate Actions Diary Adjustments SCOPE OF RELEASE IMPLEMENTATION DATE PARTIES IMPACTED BY THIS CHANGE NEXT STEPS CONTACTING ASX CLIENT SEGREGATION ENHANCEMENTS OVERVIEW OF CONTENTS FOR CLIENT SEGREGATION ENHANCEMENTS MANDATORY CHANGES FOR CLEARING PARTICIPANTS MANDATORY CHANGE TO PAYMENT PROVIDER MESSAGING MANDATORY CHANGES FOR PARTICIPANTS DEMAND SINGLE ENTRY CHESS TO CHESS TRANSFER REQUEST [001-02] EFFECTED DEMAND SINGLE ENTRY CHESS TO CHESS TRANSFER [002 02] TRANSFEROR SUBMITTED DEMAND TRANSFER [003-02] DEMAND DUAL ENTRY CHESS TO CHESS TRANSFER REQUEST [005-03] ISSUER SPONSORED TO CHESS TRANSFER REQUEST [015-03] ISSUER SPONSORED TO CHESS CONVERSION REQUEST [017-03] DUAL ENTRY SETTLEMENT NOTIFICATION [101-02] SINGLE ENTRY SETTLEMENT CHESS TO CHESS TRANSFER REQUEST [105-02] SCHEDULED SINGLE ENTRY SETTLEMENT CHESS TO CHESS TRANSFER [106-01] SCHEDULED SETTLEMENT CHESS TO CHESS TRANSFER REQUEST [107-01] CANCELLED SETTLEMENT INSTRUCTION [116-01] SINGLE ENTRY SETTLEMENT CHESS TO CHESS TRANSFER CANCELLATION REQUEST [119-01] NET TRUST AMOUNT MOVEMENT [186-01] CHANGE TO PAYMENT PROVIDER MESSAGING PARTICIPANT FUNDS OBLIGATION [310-02] APPENDIX 1 RESTRICTIONS ON EXISTING TRANSFER MESSAGING Copyright 2014 ASX Limited ABN All rights reserved

3 1. Overview 1.1. Background 1.2. Phase Phase 2 As indicated in ASX s Consultation Paper on Financial Stability Standards Implementation released on 29 July 2013 and in ASX s subsequent Market Feedback Statement released on 13 vember 2013 (refer to the links below), ASX is required to make certain rule and process changes for the purpose of achieving materially equivalent protection of client assets to that offered through a client omnibus account for the purposes of paragraph of the Financial Stability Standards for Central Counterparties. The enhancements focus on the treatment of client stock and funds during the settlement process between Trade date (T) and Settlement date (T+3) and are being introduced in two phases as defined below. Phase 1 includes the introduction of rule changes to: Confirm that stock that is held in the participants Accumulation Account is held beneficially on behalf of the underlying client. Include a requirement for participants to reconcile their Accumulation Account on a daily basis at the client level. Ensure that funds being held in the participants trust account can only be withdrawn once the underlying client has been allocated the respective stock to which the funds relate. Phase 1 is now complete as advised via ASX tice dated 16 April 2014 and these rules became effective on Monday 28 April Phase 2 includes the introduction of changes to some of the Clearing House Electronic Sub- System (CHESS) messaging process flows together with changes to the relevant ASX Clear Pty Ltd (ASX Clear) and/or ASX Settlement Pty Ltd (ASX Settlement) Operating Rules. Following feedback received from participants and vendors via the vendor participant workshop consultation process, ASX has now incorporated the following amendments to the original proposal: Transfers between a client s broker sponsored holding and the Accumulation Account will still be allowed. Transfers between a client s broker sponsored holding and the Settlement Account will no longer be allowed. Issuer Sponsored Holding transfers and conversions to the participants Settlement Account will no longer be allowed. Movement of stock from the Accumulation Account to the Settlement Account to facilitate CHESS batch settlement will only be permitted via the new MT107 CHESS message which should include the relevant client trustable amount. Each time a message is sent to transfer stock from the Accumulation Account, CHESS will validate that there is sufficient stock to cover all the previously sent MT107 CHESS messages (i.e. there can be no part settlement of a MT107 CHESS message between the Accumulation Account and the Settlement Account). For transfers into the Settlement Account the new MT107 CHESS message can be scheduled for a forward Settlement Date and participants may elect to send several MT107 CHESS messages per day, per stock, or one net message per stock covering that day s obligations. If sending a single net message the gross client trustable amount for that stock must be included in the message. Copyright 2014 ASX Limited ABN All rights reserved

4 CHESS Release Business and Technical Overview The MT107 CHESS message can also be used to schedule stock from a participants Direct or Sponsored HIN into the Settlement Account. However, if there is insufficient stock already held on the Direct or Sponsored HIN, or received on that settlement day, the MT107 CHESS message will fail and be re-scheduled for the next settlement day. te that CHESS will not part deliver a MT107 CHESS message scheduled out of the Sponsored or Direct HIN. To reduce the intraday liquidity impact, the new MT107 CHESS message can also be used for the scheduling (via CHESS batch) of stock from the Settlement Account to a Sponsored or Direct Holder Identification Number (HIN). The message should include the relevant client trustable amount to be withdrawn from the participants trust account. CHESS will net the trustable amounts on all the MT107 CHESS messages coming into the Settlement Account with those scheduled to come out of the Settlement Account and provide the Payment Provider with a net trustable amount to be either funded into or withdrawn from the trust account. The notification to the Payment Provider is at the payment facility level. CHESS will aggregate the trust amount accordingly, so if more than one payment facility is used a Payment Provider will receive multiple trust amounts. CHESS will also send a MT186 message to the participant confirming the net trustable amount advised to the payment provider. For MT107 CHESS messages scheduledd to transfer stock out of the Settlement Account, if there is insufficient stock received into the Settlement Account on that settlement day, the MT107 CHESS message will fail and be re-scheduled for the next settlement day. te that CHESS will not part allocate to a MT107 CHESS message scheduled out of the Settlement Account. Enhancements to ASX (Clear and/or Settlement) Operating Rules will require all other transfers of client stock out of the Accumulation Account (that are not part of the CHESS batch process) to be funded into the participants trust account on the same day (subject to certain potential exceptions based on the Corporations Act). All other movement of stock by the participant into the Settlement Account (except via the MT107 CHESS message) is no longer allowed. There is no change to any movement of stock that originates from the Settlement Account. There is no change to movement of stock between a participants "Direct" and "Sponsored" HIN's. There is no change to movement of stock from one participant to another via CHESS batch, except the source account for the clearing participant cannot be the Accumulation Account. te: These changes only relatee to clearing and settlement participants. There are no changes being introduced for messages used by settlement only participants. See Appendix 1 Restrictions on Existing Transfer Messaging for a list of all CHESS messages to and from a clearing participant s Accumulation Account and Settlement Accounts and the potential impact on their business flows Corporate Actions Diary Adjustments As currently applies to the MT105 CHESS message, automatic diary adjustments for corporate actions that impact security holdings (e.g. restructures, splits, consolidations, bonus and rights) will be applied to unsettled MT107 CHESS messages scheduledd at the close of business on the relevant record date. However no value adjustments (e.g. dividends, capital returns) will be applied to unsettled MT107 CHESS messages. Copyright 2014 ASX Limited ABN All rights reserved

5 2. Scope of Release The scope of CHESS Client Segregation enhancements are: Enhancement 1 Introduce client segregation functionality. Inclusion of new and modified messaging to identify the trustable amount on certain sell and buy transactions. Benefits Enhanced protection of client stock and funds in the event of a default or insolvency. Fulfilment of ASX Clear regulatory obligations regarding client account segregation Implementation Date CHESS Client Segregation enhancements will be effective from mid May The exact date will be communicated closer to the time Parties Impacted by this Change 2.3. Next Steps All Clearing and Settlement participants and Payment Providers are impacted by this change. Settlement only participants (custodians, institutions) are not affected by these changes. The information in this document should be used to initiate analysis and assessment of changes required within customer systems and workflows. To facilitate the upgrade, the CHESS External Test Environment will be made available early All Clearing & Settlement participants and relevant CHESS system vendors are required to have their CHESS Interface ( system ) accredited for the processing of the following new messages: - Scheduled Settlement CHESS to CHESS Transfer Request (MT107-01) message; and Net Trust Amount Movement (MT186-01) All Payment Providers and relevant CHESS system vendors are required to have their CHESS Interface ( system ) accredited for the processing of the modified Participant Funds Obligation (MT310-02) message Contacting ASX Client Segregation Enhancements For any information regarding Client Segregation enhancements, ASX can be contacted on: Brendon Luscombe - General Manager, Clearing Risk Management T: , E: Brendon.luscombe@asx.com.au Anne-Marie Fisher-Taylor - Architect, CSD Settlement Development T , E: Anne-Marie.Fisher-Taylor@asx.com.au. Copyright 2014 ASX Limited ABN All rights reserved

6 3. Overview of Contents for Client Segregation Enhancements 3.1. Mandatory Changes for Clearing Participants Impacted Parties Benefits to Impacted Parties Clearing and Settlement Participants (i.e. not settlement only participants). te: ASX Settlement only participants (custodians, institutions) are not affected by these changes. To meet regulatory requirements, participants will be required to include the client s trustable component on all transfers (via the new MT107 CHESS message) from the Accumulation Account to the Settlement Account for the purpose of meeting CHESS batch settlement obligations. Participants will also be able to schedule units (also via the new MT107 CHESS message) from either a Direct or Sponsored HIN to the Settlement Account. The message should include the relevant trustable amount to be funded into the trust account. In addition participants will be able to schedule units (via the new MT107 CHESS message) from the Settlement Account to a Sponsored or Direct HIN. The message should include the relevant trustable amount to be withdrawn from the trust account. CHESS will then net the trustable amounts on all the MT107 CHESS messages coming into the Settlement Account with those scheduled to come out of the Settlement Account and provide the Payment Provider with a net trustable amount to be either funded into or withdrawn from the trust account. What is the Proposal? Description After CHESS batch settlement reporting has completed, CHESS will send the participant a new MT186 message to notify them of the net trustable amount that their payment provider will transfer into or from their trust account. The proposal is to ensure that each time client units are moved into a participants settlement account to facilitate a settlement obligation the respective trustable amount is also transferred into the participants trust bank account as part of the CHESS batch process. In addition any client units transferred out of Accumulation Account outside of the CHESS batch process is funded into trust on the same day. Processing Accumulation to Settlement Processing of MT107 CHESS messages from Accumulation Account to the Settlement Account provided that there are sufficient units in the Accumulation Account Include on the MT107 CHESS message the trustable amount relating to client units. CHESS will allow for the cancellation of the MT107 CHESS message up until settlement cut off on settlement day. New Validation Rules for MT107 The Delivering HIN must be Accumulation Account The Receiving HIN must be Settlement Account Trust Amount must be zero or greater than zero Copyright 2014 ASX Limited ABN All rights reserved

7 Units must be available in the Accumulation Account to be accepted. Example Accumulation Account has 2,500 BHP. Transaction 1 - Schedule 1,000 BHP from Accumulation Account to the Settlement Account. Accepted as sufficient units in Accumulation Account. Transaction 2 - Schedule 2,000 BHP from Accumulation Account to the Settlement Account. Rejected as insufficient units in Accumulation Account. CHESS will tally up all scheduled settlement transactions to-date, and subtract the unit quantity from the total units in the Accumulation delivering HIN for that security to determine if the current transaction is accepted. te: CHESS will also validate during processing of the Scheduled Settlement CHESS to CHESS Request that sufficient Cum Entitlement and Foreign Guaranteed units are available when applicable. Processing Direct or Sponsored HIN to Settlement Processing of MT107 CHESS messages from Direct or Sponsored HIN to the Settlement Account provided that there are sufficient units (at the time of settlement commencing) in the Direct or Sponsored HIN. Include on the MT107 CHESS message the trustable amount relating to client units. CHESS will allow for the cancellation of the MT107 CHESS message up until settlement cut off on settlement day. An MT107 CHESS messages not processed due to insufficient units will fail and be rescheduled for the next settlement day. te that CHESS will not part allocate to a MT107 CHESS message from a Sponsored or Direct HIN. New Validation Rules for MT107 The Delivering HIN must be a Direct or Sponsored HIN The Receiving HIN must be Settlement Account Trust Amount must be zero or greater than zero Unit Quantity must be available in the Direct or Sponsored HIN at the time of settlement commencing. Example 1 Direct HIN has 1,000 RIO. Transaction 1 - Schedule 2,000 RIO from Direct HIN to the Settlement Account. Transaction 2 - As part of the CHESS batch process on settlement day the participant receives 1,000 RIO via a MT101 CHESS message into their Direct HIN. In this case the orginal MT107 CHESS message for 2,000 RIO will be processed as the participant has sufficient units. Copyright 2014 ASX Limited ABN All rights reserved

8 Example 2 Direct HIN has 1,000 RIO. Transaction 1 - Schedule 2,000 RIO from Direct HIN to the Settlement Account. Transaction 2 - As part of the CHESS batch process on settlement day the participant receives 500 RIO via a MT101 CHESS message into their Direct HIN. In this case the orginal MT107 CHESS message for 2,000 RIO will be rejected as the Direct HIN only has 1,500 RIO available. Processing Settlement to Direct or Sponsored HIN Processing of MT107 CHESS messages from Settlement Account to Direct or Sponsored HIN provided that there are sufficient units (following CHESS batch processing) in the Settlement Account. Include on the MT107 CHESS message the trustable amount relating to client units. CHESS will allow for the cancellation of the MT107 CHESS message up until settlement cut off on settlement day. MT107 CHESS messages not processed due to insufficient units will fail and be rescheduled for the next settlement day. te that CHESS will not part allocate to a MT107 CHESS message from the Settlement Account to a Sponsored or Direct HIN. New Validation Rules for MT107 The Delivering HIN must be Settlement Account The Receiving HIN must be a Sponsored or Direct HIN Unit Quantity must be available in Settlement Account following CHESS batch processing. Trust Amount must be zero or less than zero Example 1 Settlement HIN has 2,000 WBC following CHESS batch processing. Transaction 1 - Scheduled 1,000 WBC from Settlement Account to a Direct HIN, transaction processed. Transaction 2 - Scheduled 1,000 WBC from Settlement Account to a Sponsored HIN, transaction processed. Transaction 3 - Scheduled 500 WBC from Settlement Account to a Sponsored HIN, transaction failed as insufficient units. te: CHESS will allocate to the MT107 CHESS messages on a best fit basis. Processing - Net Trust Amount Movement confirmation As part of CHESS settlement reporting, the new MT186 will be generated and sent to the participant. This message will notify them of the net trustable amount that was provided to their payment Copyright 2014 ASX Limited ABN All rights reserved

9 provider. Likely CHESS Impact Refer to Mandatory Changes for Participants for more information. New Messages MT107-Scheduled Settlement CHESS to CHESS Transfer Request. MT186-Net Trust Amount Movement. Modifications to existing messages: MT001 - Demand Single Entry CHESS to CHESS Transfer Request (EIS Section 4 Purpose modification) MT002 - Effected Demand Single Entry CHESS to CHESS Transfer (EIS Section 4 Purpose modification) MT003 - Transferor Submitted demand transfer (EIS Section 4 Purpose modification) MT005 - Demand Dual Entry CHESS to CHESS Transfer Request (EIS Section 4 Purpose modification) MT015 - Issuer Sponsored to CHESS Transfer Request (EIS Section 4 Purpose modification) MT017 - Issuer Sponsored to CHESS Conversion Request (EIS Section 4 Purpose modification) MT101 - Dual Entry Settlement tification (EIS Section 4 Purpose modification) MT105 - Single Entry Settlement CHESS to CHESS Transfer Request (EIS Section 4 Purpose modification) MT106 - Scheduled Single Entry Settlement CHESS to CHESS Transfer (EIS Section 4 Purpose modification) MT116 - Cancelled Settlement Instruction (EIS Section 4 Purpose modification) MT119 - Scheduled Single Entry Settlement CHESS to CHESS Cancellation Transfer (EIS Section 4 Purpose modification). Copyright 2014 ASX Limited ABN All rights reserved

10 3.2. Mandatory Change to Payment Provider Messaging Impacted Parties Benefits to Impacted Parties What is the Proposal? Description Likely CHESS Impact CHESS Payment Providers (Banks) Provides a mechanism whereby the Payment Provider can readily identify the trustable amount that must be credited to or withdrawn from the participants trust bank account. The trust amount field will be added to the MT310 Participant Funds Obligation message. The proposal is to modify the existing Payment Provider directed CHESS Participant Funds Obligation message (MT310) to include a trust amount. The trust amount notified to the Payment Provider must be transferred to or from the participants trust account as part of the CHESS batch settlement process. This trust amount is to meet the Operating Rule requirement to ensure that all clients are protected intraday Introduction of modified payment details to Payment Providers will be a mandatory change for all Payment Providers. As such all Payment Providers (or their system vendors) are encouraged to complete user acceptance testing prior to system accreditation. The accreditation will be for the MT which is being introduced as a result of the trust amount field being added to the MT310. During CHESS Batch Settlement, CHESS will send a MT Participants Funds Obligation messages per payment facility to the Payment Provider. The Amount field process will not change The new trust amount field will be the total trustable amount that Payment Provider must credit to or withdraw from the participants trust account. Modification to existing message Participant Funds Obligation New CHESS Message Fields Trust Amount te: The version number will change from 01 to 02 with the addition of the trust amount field. Copyright 2014 ASX Limited ABN All rights reserved

11 4. Mandatory Changes for Participants This section outlines modifications and additions to CHESS in terms of data fields and messaging to complement the business initiatives Demand Single Entry CHESS to CHESS Transfer Request [001-02] Bit Position Field Name Format Mandatory/Optional (M/O) 2 Security Code 12 Character M 11 Transaction Basis 1 Character M 16 Receiving HIN 10 Numeric O 17 Delivering HIN 10 Numeric O 34 Participant Reference 16 Character O 35 Supplementary Reference 16 Character O 38 Override Basis of Movement 1 2 Character O 39 Override Basis of Movement 2 2 Character O 40 Override Basis of Movement 3 2 Character O 41 Override Basis of Movement 4 2 Character O 42 Override Basis of Movement 5 2 Character O 48 Transaction Id 16 Character M 52 Unit Quantity 11 Numeric M 67 Stamping Consideration 14 Numeric, 2 decimal O 68 Duty Payable 14 Numeric, 2 decimal O 69 Duty Type 1 Character O 70 Underlying Reference 16 Character O 176 Guaranteed Foreign Indicator 2 Character O Copyright 2014 ASX Limited ABN All rights reserved

12 The purpose of this transfer request is to enable a participant to transfer securities between two CHESS holdings under its control, e.g. between a participant's direct and controlled holdings. The destination account cannot be the participants default Settlement account unless the source account is another settlement account controlled by the participant. The participant is advised whether the transfer request was effected or rejected. Either the Receiving HIN or the Delivering HIN must be present in the message. Where only one HIN is present, it must not be the same as the default HIN. If both are present, they must be different. The transfer request contains the following: Sender Participant Recipient CHESS Transmission Cut off times: Settlement Cut-off Time - if the message is to be processed prior to the next settlement process End of Day - if the message is to be processed prior to the end of day process. Prerequisites none. Copyright 2014 ASX Limited ABN All rights reserved

13 4.2. Effected Demand Single Entry CHESS to CHESS Transfer [002 02] Bit Position Field Name Format Mandatory/Optional (M/O) 21 Processing Timestamp 22 Character M 34 Participant Reference 16 Character O 38 Basis of Movement 1 2 Character O 39 Basis of Movement 2 2 Character O 40 Basis of Movement 3 2 Character O 41 Basis of Movement 4 2 Character O 42 Basis of Movement 5 2 Character O 48 Transaction Id 16 Character M 53 Transferor Holding Balance 11 Numeric M 54 Transferee Holding Balance 11 Numeric M 62 Origin Transaction Id 16 Character M The purpose of this transfer is to notify a participant that a transfer of securities has been effected between two CHESS Holdings under its control, e.g. between a participant's direct and controlled holdings. The transfer contains the following: Sender CHESS Recipient Participant Transmission Cut off times - ne Prerequisites Receipt of a 001 Demand Single Entry CHESS to CHESS Transfer Request. Copyright 2014 ASX Limited ABN All rights reserved

14 4.3. Transferor Submitted Demand Transfer [003-02] Bit Position Field Name Format Mandatory/Optional (M/O) 2 Security Code 12 Character M 11 Transaction Basis 1 Character M 16 Receiving HIN 10 Numeric O 17 Delivering HIN 10 Numeric O 19 Receiving PID 5 Numeric M 34 Participant Reference 16 Character O 35 Supplementary Reference 16 Character O 38 Override Basis of Movement 1 2 Character O 39 Override Basis of Movement 2 2 Character O 40 Override Basis of Movement 3 2 Character O 41 Override Basis of Movement 4 2 Character O 42 Override Basis of Movement 5 2 Character O 48 Transaction Id 16 Character M 52 Unit Quantity 11 Numeric M 67 Stamping Consideration 14 Numeric, 2 decimal O 68 Duty Payable 14 Numeric, 2 decimal O 69 Duty Type 1 Character O 70 Underlying Reference 16 Character O 176 Guaranteed Foreign Indicator 2 Character O The purpose of this transfer is to enable two participants within a Related Participant Structure to transfer securities between holdings under their control. The Parent Participant may deliver securities to a Related Participant ; the Related Participant may deliver securities to the Parent Participant. The transferor participant is advised whether the transfer request was effected or rejected. If the transfer is effected, the transferee participant is advised the details of the transfer. Copyright 2014 ASX Limited ABN All rights reserved

15 The destination account cannot be the participants Settlement account. Participants should use the new MT107 CHESS message. The transfer contains the following: Sender Participant Recipient CHESS Transmission Cut off times: Settlement Cut-off Time - if the message is to be processed prior to the next settlement process End of Day - if the message is to be processed prior to the end of day process Prerequisites ne. Copyright 2014 ASX Limited ABN All rights reserved

16 4.4. Demand Dual Entry CHESS to CHESS Transfer Request [005-03] Bit Position Field Name Format Mandatory/Optional (M/O) 2 Security Code 12 Character M 11 Transaction Basis 1 Character M 16 HIN 10 Numeric O 19 Receiving PID 5 Numeric M 20 Delivering PID 5 Numeric M 34 Participant Reference 16 Character O 35 Supplementary Reference 16 Character O 38 Override Basis of Movement 1 2 Character O 39 Override Basis of Movement 2 2 Character O 40 Override Basis of Movement 3 2 Character O 41 Override Basis of Movement 4 2 Character O 42 Override Basis of Movement 5 2 Character O 48 Transaction Id 16 Character M 52 Unit Quantity 11 Numeric M 67 Stamping Consideration 14 Numeric, 2 decimal O 68 Duty Payable 14 Numeric, 2 decimal O 69 Duty Type 1 Character O 70 Underlying Reference 16 Character O 176 Guaranteed Foreign Indicator 2 Character O 178 Secondary Matching Flag 1 Character O The purpose of the transfer request is to transfer securities between CHESS holdings controlled by different participants in CHESS. Both participants are required to enter requests which are then matched. Copyright 2014 ASX Limited ABN All rights reserved

17 If the transfer is originating from the Accumulation Account then there has to be sufficient units to cover all previously accepted MT107 messages. If a match is made the transfer is effected immediately and the result is advised to both participants. The Basis of Movement is determined at the point the transfer is effected. If no match is made the request is flagged as unmatched, the submitting participant is advised that the request is unmatched and the counterparty is advised of the details. If Secondary Matching Flag is used, i.e. populated with Y, the Supplementary Reference field becomes mandatory and populated data must match with counterparty. The supplementary Reference field must not contain spaces. The transfer request contains the following: Sender Participant Recipient CHESS Transmission Cut off times: Settlement Cut-off Time - If the message is to be processed prior to the next settlement process End of Day - If the message is to be processed prior to the end of day process. Prerequisites ne. Copyright 2014 ASX Limited ABN All rights reserved

18 4.5. Issuer Sponsored to CHESS Transfer Request [015-03] Bit Position Field Name Format Mandatory/Optional (M/O) 2 Security Code 12 Character M 11 Transaction Basis 1 Character M 16 Receiving HIN 10 Numeric O 25 Movement Reason 1 Character M 28 Location of Register 3 Character O 34 Participant Reference 16 Character O 35 Supplementary Reference 16 Character O 38 Override Basis of Movement 1 2 Character O 39 Override Basis of Movement 2 2 Character O 40 Override Basis of Movement 3 2 Character O 41 Override Basis of Movement 4 2 Character O 42 Override Basis of Movement 5 2 Character O 46 PIN 4 Numeric O 48 Transaction Id 16 Character M 51 Securityholder Reference Number 12 Character M 52 Unit Quantity 11 Numeric M 67 Stamping Consideration 14 Numeric, 2 decimal O 68 Duty Payable 14 Numeric, 2 decimal O 69 Duty Type 1 Character O 70 Underlying Reference 16 Character O 176 Guaranteed Foreign Indicator 2 Character O Copyright 2014 ASX Limited ABN All rights reserved

19 The purpose of the transfer request is to enable securities in an Issuer sponsored holding to be transferred to the CHESS sub-register. The transfer request requires authorisation by the Registry. Requests to transfer to the participants Settlement Account will be rejected. The participant is advised if the transfer request has been passed to the Registry or rejected by CHESS. The transfer request details are forwarded to the Registry. The request is held in CHESS until a response is received from the Registry. The transfer request contains the following: Sender Participant Recipient CHESS Transmission Cut off times: Settlement Cut-off Time less 12 hours If the securities being moved to the CHESS sub-register are required for settlement purposes. Prerequisites ne. Copyright 2014 ASX Limited ABN All rights reserved

20 4.6. Issuer Sponsored to CHESS Conversion Request [017-03] Bit Position Field Name Format Mandatory/Optional (M/O) 2 Security Code 12 Character M 16 Receiving HIN 10 Numeric O 25 Movement Reason 1 Character M 28 Location of Register 3 Character O 34 Participant Reference 16 Character O 35 Supplementary Reference 16 Character O 38 Override Basis of Movement 1 2 Character O 39 Override Basis of Movement 2 2 Character O 40 Override Basis of Movement 3 2 Character O 41 Override Basis of Movement 4 2 Character O 42 Override Basis of Movement 5 2 Character O 46 PIN 4 Numeric O 48 Transaction Id 16 Character M 51 Securityholder Reference Number 12 Character M 52 Unit Quantity 11 Numeric M 176 Guaranteed Foreign Indicator 2 Character O Copyright 2014 ASX Limited ABN All rights reserved

21 The purpose of the conversion request is to enable securities in an Issuer Sponsored Holding to be converted to the CHESS sub-register. The conversion request requires authorisation by the principal Registry. Requests to convert securities from an Issuer Sponsored Holding to the participants Settlement Account will be rejected by CHESS. The participant is advised if the conversion request has been passed to the Registry or rejected by CHESS. The conversion request details are forwarded to the Registry. The request is held in CHESS until a response is received from the Registry. The conversion request contains the following: Sender Participant Recipient CHESS Transmission Cut off times: Settlement Cut-off Time less 12 hours If the securities being moved to the CHESS sub-register are required for settlement purposes. Prerequisites ne. Copyright 2014 ASX Limited ABN All rights reserved

22 4.7. Dual Entry Settlement tification [101-02] Bit Position Field Name Format Mandatory/Optional (M/O) 2 Security Code 12 Character M 3 Settlement Amount 15 +/- Numeric, 2 decimal O 11 Transaction Basis 1 Character M 12 Settlement Date 8 Numeric M 13 Trade Date 8 Numeric O 16 HIN 10 Numeric O 19 Receiving PID / Payer PID 5 Numeric M 20 Delivering PID / Payee PID 5 Numeric M 34 Participant Reference 16 Character O 35 Supplementary Reference 16 Character O 38 Override Basis of Movement 1 2 Character O 39 Override Basis of Movement 2 2 Character O 40 Override Basis of Movement 3 2 Character O 41 Override Basis of Movement 4 2 Character O 42 Override Basis of Movement 5 2 Character O 48 Transaction Id 16 Character M 52 Unit Quantity 11 Numeric M 56 Part-Settlement 1 Character O 67 Stamping Consideration 14 Numeric, 2 decimal O 68 Duty Payable 14 Numeric, 2 decimal O 69 Duty Type 1 Character O 70 Underlying Reference 16 Character O 176 Guaranteed Foreign Indicator 2 Character O Copyright 2014 ASX Limited ABN All rights reserved

23 This notification contains two purposes one with units and one without units. The purpose for each of these is listed below. The notification contains the following: Sender Participant Recipient CHESS Transmission Cut off times: Valued Instruction Cut-off Time - If the message has a non-zero Settlement Amount and is to be processed prior to the commitment of value settlement instructions for the next settlement process Settlement Cut-off Time - If the message has a zero Settlement Amount and is to be processed prior to the next settlement process. Prerequisites ne. Purpose for Delivery Transaction with Units The purpose of the transaction is to notify to CHESS the details of a settlement between two participants. Each participant independently notifies settlement details which are matched by the system. The delivery HIN cannot be the participant s Accumulation Account. The Settlement Amount is only provided if the value is to be settled in the settlement process. If the instruction is free of value or the value cannot be settled in CHESS, the Settlement Amount should not be provided. If a match is made, the instruction is scheduled for later settlement and the status is advised to both participants. If the notification is not matched, it is flagged as unmatched and the counterparty is advised of the notification details. The tification is matched (on the criteria below) against other unmatched tifications that have been sent to CHESS. The criteria are: Security Code Settlement Amount (within the Settlement Amount Tolerance) Transaction Basis Settlement Date Receiving PID/Payer PID Delivering PID/Payee PID Basis of Movement (using defaults or overrides as necessary) Unit Quantity Trade Date (value, market only) Guaranteed Foreign Indicator. If one of the participants indicates that the settlement instruction must not be part-settled, the settlement instruction will not be part-settled. Purpose for Payment Transaction without Units (Miscellaneous Payments) Copyright 2014 ASX Limited ABN All rights reserved

24 The purpose of the transaction is to notify CHESS the details of a payment between two participants scheduled for settlement in the CHESS batch. Each participant independently notifies payment details which are matched by the system. The tification is matched against other unmatched tifications that have been sent to the CHESS using the same matching criteria listed for delivery transactions. If a match is made, the instruction is scheduled for later settlement and the status is advised to both participants. If the notification is not matched, it is flagged as unmatched and the counterparty is advised of the notification details.the tification must be populated as below. All other fields must be omitted. Field Instruction Security Code As defined in EIS Section 8 Settlement Amount MUST be greater than zero Transaction Basis MUST be F Settlement Date A valid settlement date in CHESS HIN Optional - only populate to direct payment to a HIN-specific payment facility. Otherwise, the default payment facility will be targeted. Receiving PID/Payer PID Participant paying funds Delivering PID/Payee PID Participant receiving funds Participant Reference Optional internal reference information Supplementary Reference Optional will be passed to counterparty Transaction ID A valid transaction ID in CHESS Unit Quantity MUST be zero Part-Settlement MUST be Y or blank Underlying Reference Optional internal reference information All other fields must be omitted. The table below summarises the edit rules that CHESS applies to Dual Entry Settlement tification (101) messages for differing values of the Transaction Basis field. Transaction Basis Settlement Trade Date Stamp Duty Amount Market (M) zero not permitted not applicable not zero required not applicable Off-market (O) zero not permitted not applicable not zero not permitted Duty Paid (K), Loan (L), or Loan Return (M); other fields not applicable Facility for n Reportable Transactions (F) zero optional not applicable Miscellaneous Payments (F) not zero optional not applicable greater than zero not applicable not applicable IPO (I) zero optional not permitted not zero optional not permitted Stock Lending Activity (L) zero not permitted not applicable not zero not permitted not applicable Copyright 2014 ASX Limited ABN All rights reserved

25 Copyright 2014 ASX Limited ABN All rights reserved

26 4.8. Single Entry Settlement CHESS to CHESS Transfer Request [105-02] Bit Position Field Name Format Mandatory/Optional (M/O) 2 Security Code 12 Character M 11 Transaction Basis 1 Character M 12 Settlement Date 8 Numeric M 16 Receiving HIN 10 Numeric O 17 Delivering HIN 10 Numeric O 34 Participant Reference 16 Character O 35 Supplementary Reference 16 Character O 38 Override Basis of Movement 1 2 Character O 39 Override Basis of Movement 2 2 Character O 40 Override Basis of Movement 3 2 Character O 41 Override Basis of Movement 4 2 Character O 42 Override Basis of Movement 5 2 Character O 48 Transaction Id 16 Character M 52 Unit Quantity 11 Numeric M 56 Part-Settlement 1 Character O 67 Stamping Consideration 14 Numeric, 2 decimal O 68 Duty Payable 14 Numeric, 2 decimal O 69 Duty Type 1 Character O 70 Underlying Reference 16 Character O 176 Guaranteed Foreign Indicator 2 Character O The purpose of this transfer request is to enable a participant to schedule the transfer of securities between CHESS holdings under its control in a future settlement cycle, e.g. between a participant's direct and sponsored holdings. The participant is advised whether the transfer request has been rejected or scheduled. Copyright 2014 ASX Limited ABN All rights reserved

27 Delivery HIN cannot be the participants Accumulation HIN (except for an Accumulation HIN to Accumulation HIN movement). The receiving HIN cannot be the Settlement HIN if the delivery HIN is either a sponsored or Direct HIN. Either the Receiving or the Delivering HIN must be present in the message. The transfer request contains the following: Sender Participant Recipient CHESS Transmission Cut off times Settlement Cut-off Time - if the message is to be processed prior to the next settlement process. Prerequisites ne. Copyright 2014 ASX Limited ABN All rights reserved

28 4.9. Scheduled Single Entry Settlement CHESS to CHESS Transfer [106-01] Bit Position Field Name Format Mandatory/Optional (M/O) 21 Processing Timestamp 22 Character M 34 Participant Reference 16 Character O 48 Transaction Id 16 Character M 62 Origin Transaction Id 16 Character M The purpose of the transfer is to notify a participant that a Single Entry Settlement CHESS to CHESS Transfer Request or a Scheduled Settlement CHESS to CHESS Transfer Request has been received, validated and scheduled for future settlement. The transfer contains the following: Sender CHESS Recipient Participant Transmission Cut off times - ne Prerequisites Receipt of one of the following: 105 Single Entry Settlement CHESS to CHESS Transfer Request 107 Scheduled Settlement CHESS to CHESS Transfer Request. Copyright 2014 ASX Limited ABN All rights reserved

29 4.10. Scheduled Settlement CHESS to CHESS Transfer Request [107-01] Bit Position Field Name Format Mandatory/Optional (M/O) 2 Security Code 12 Character M 11 Transaction Basis 1 Character M 12 Settlement Date 8 Numeric M 16 Receiving HIN 10 Numeric O 17 Delivering HIN 10 Numeric O 34 Participant Reference 16 Character O 35 Supplementary Reference 16 Character O 38 Override Basis of Movement 1 2 Character O 39 Override Basis of Movement 2 2 Character O 40 Override Basis of Movement 3 2 Character O 41 Override Basis of Movement 4 2 Character O 42 Override Basis of Movement 5 2 Character O 48 Transaction Id 16 Character M 52 Unit Quantity 11 Numeric M 70 Underlying Reference 16 Character O 73 Trust Amount 15 ±Numeric, 2 decimal M 176 Guaranteed Foreign Indicator 2 Character O Copyright 2014 ASX Limited ABN All rights reserved

30 CHESS Release Business and Technical Overview Purpose Accumulation Account to Settlement Account The purpose of this transaction is to enable a participant to schedule the transfer of securitiess from the Accumulation Account into the Settlement Account for a future settlement cycle. The participant is equired to populate the trust amount field with the amount that relates to client trustable balances that have not been previously funded into trust. The trust amount can be zero or greater than zero. Part settlement is not allowed therefore CHESSS will validate that there are sufficient units in the Accumulation Account before accepting the message. Purpose Direct / Sponsored HIN to Settlement Account The purpose of this transaction is to enable a participant to schedule the transfer of securitiess from a Direct or Sponsored HIN into the Settlement Account for a future settlement cycle. The participant is equired to populate the trust amount field with the amount that relates to client trustable balances that have not been previously funded into trust. The trust amount can be zero or greater than zero. Part settlement is not allowed therefore as part of CHESS batch processing CHESS will validate that there are sufficient units in the Direct or Sponsored HIN before settling the message. Purpose Settlement Account to Direct or Sponsored HIN The purpose of this transaction it to enable the movement between the participants Settlement Account and a Direct or Sponsored HIN under their control. The participant is equired to populate the trust amount field with the amount that relates to client trustable balances that can be withdrawn from the participants trust account. There will be no part settlement of these transactions. Where there are insufficient units available in the Settlement Account during CHESS batch process, CHESS will reschedule the settlement for the next settlement day. te: The trust amount will not form part of the participants CHESS settlement obligation. The transfer request contains the following: Sender Participant Recipient CHESS Transmission Cut off times - Settlement Cut-off Time if the message is to be processed prior to specified settlement date Prerequisites ne. Trust Amount Format Definition Allowable Values 15 +/- Numeric, 2 decimal To schedule a transfer of units from the participant s: Accumulation Account to the Settlement Account Direct or Sponsored HIN to the Settlement Account Settlement Account to a Sponsored or Direct HIN the message needs to identify the clients trust component. The introduction of the Scheduled Settlement CHESS to CHESSS Transfer message can be seen in the diagram below. Copyright 2014 ASX Limited ABN All rights reserved

31 Copyright 2014 ASX Limited ABN All rights reserved

32 CHESS Release Business and Technical Overview Cancelled Settlement Instruction [116-01] Bit Position Field Name Format Processing Timestamp 22 Character Target Transaction Id 16 Character Origin Transaction Id 16 Character Cancelling Transaction Id 16 Character Matching Transaction Id 16 Character Cancellation Reason 1 Character Mandatory/Optional (M/O) M M M M O M The purpose of this instruction is to notify a participant that an unmatched or scheduled settlement instruction (Net Batch or RTGS) has been cancelled. An unmatched Dual Entry Settlement tification or scheduledd Single Entry Settlement Transfer Request or Scheduled Settlement CHESS to CHESS Transfer Request may be cancelled by the participant that submitted the original message. An unmatched Dual Entry Settlement tification may be cancelled by CHESS housekeeping actions. A scheduled Dual Entry Settlement Instruction may only be cancelled following agreement between the settlement counterparties. This agreement is achieved through the matching of cancellation requests. A Net Broker Obligation may be cancelled through the receipt of a 139 Isolate Counterparty Request by CHESS. Broker/broker trades may be cancelled via an Approved Market Operator Trading System that registers trades through CHESS. te: CHESS does not send the clearing participant a 116 Cancelled Settlement Instructionn where the participant has elected (for a crossing) not to receivee the message. The cancelled settlement instructionn contains the following: Sender CHESS Recipient Participant/Product Issuer Settlement Participant Transmission Cut off - ne Prerequisites: The participantt must have received one of the following: One of the following requests: Copyright 2014 ASX Limited ABN All rights reserved