Debt: Treasury Bonds T+2
Treasury Notes: T+1
Money Market: T+0
Over-the-Counter (OTC): Not applicable
CHESS: DVP trades are pre-matched electronically prior to settlement cutoff at 10:30 on settlement date. Once the trades are matched the instructions are irrevocable unless canceled by both parties prior to settlement cutoff. Around 14:00 on settlement date, CHESS simultaneously transfers shares and funds to the participant’s account.
Demand transactions involve the transfer of shares only, via CHESS, and the settlement of the funds via an alternative method such as RTGS and Austraclear. Demand and free of payment transactions can settle any time up until the CHESS cut off time on value date at 19:00. All CHESS-eligible securities must clear through CHESS.
Austraclear: transactions are pre-matched. Cash and security positions are verified on SD. The system generates electronic cash and securities transfers, cleared on a trade-by-trade basis.
Equities and corporate bonds: trades are locked-in at source through SEATS, the automated trading system. The seller forwards a security transfer form and securities to the buying broker on T+3, in exchange for payment.
Government bonds: transfer documents, which replace physical certificates, are exchanged against physical cheques. The transfer documents are presented by the buyer to the issuer to ensure transfer.
Money market: bearer instruments are delivered against payment by cheque.
Book-entry: Instantaneously upon settlement
Physical: Upon lodgement of valid documentation and vetting by the registry. Under ASX listing rules, any physical registrations must be completed within 5 business days.
Bank for International Settlements Model (BIS):
SFE Austraclear employs DvP Model 1, where there is simultaneous gross settlement of securities with real time gross settlement (RTGS) of cash. That is, the final transfer of an asset or security to the buying party only occurs when the transfer of cleared funds in payment for the security to the selling party, and vice-versa, is confirmed. This simultaneous exchange of cash and security along with the RTGS of inter-bank obligations, guarantees irrevocability and offers the highest level of customer protection available.
RTGS and Austraclear provide real time payments for wholesale market. SFE Austraclear offers the capability to settle electronic cash transfers via the RBA Real Time Gross Settlement (RTGS) system. The Electronic Cash Transfers (ECTs) are two-sided and can be bank-to-corporate (B2C), corporate-to-corporate (C2C), and bank-to-bank (B2B). Competitively priced, the SFE Austraclear solution offers a reliable, secure, and independent service to transfer funds on a RTGS basis. Significant Straight Through Processing (STP) opportunities are also available through the use of ECTs.
Upon receipt of an Electronic Cash Transfer (ECT) instruction, the request is electronically matched with the counter-party and sent to the RTGS queue for settlement. End of day cheque clearance between Australasian banks for retail payments/cheques is also provided.
Internationally, CLS Bank International provides payments in AUD as part of a unique real-time process enabling simultaneous FX settlement for fifteen currencies across the globe. The settlement risk in cross currency payment instruction settlement is eliminated as CLS Bank link the local central bank Real Time Gross Settlement (RTGS) systems during a five-hour window of their overlapping business hours. In this window, settlement instructions for a particular date are settled, funds are requested to be paid in and are then paid out by CLS Bank.
Yes, overdrafts are permitted in the market, however these need to be agreed with the local custodian