Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 4

Recommendation 5 Recommendation 6 Recommendation 7 Recommendation 8

Market selection

Recommendation 6

Convergence of Securities Systems, both within countries and across borders, should be encouraged where this eliminates operational risk, reduces cost and enhances market efficiency.

1.	Is the depository linked electronically and in real time with other segments of the core market infrastructure (e.g. trading platforms, netting systems, matching platforms, payment systems)?	Austraclear Yes - the Austraclear system is an approved realtime feeder system to Australia's RTGS system. RITS Yes, to the payments system (as noted in 2.2 above, RITS is also Australia's interbank settlement system). It also provides for matching of trade details as a compulsory precursor to settlement testing. CHESS Yes.
2.	Is there one or more depository or settlement system in the market?	Yes. RITS (for CGS), Austraclear (for other debt securities), CHESS (for equities) and the SFE (for futures). All interbank settlement for these systems occurs across RITS (RTGS).
3.	If there are several, has a consolidation been considered? If yes, by when?	Austraclear Yes - Austraclear Limited and the Sydney Futures Exchange (SFE) have recently merged. RITS Yes. System operators and major participants have met in a forum established by the RBA. Consolidation of debt securities settlements is under active consideration and is likely in the short to medium term. CHESS Some consolidation has been attempted; for example a bid by ASX to take over the Sydney Futures Exchange would have led to the consolidation of the futures and options clearing houses. However the takeover was thwarted by the competition regulator. Consolidation of securities clearing houses continues to be a matter of debate.
4.	Does (do) the securities system(s) allow other domestic or foreign systems to establish direct links on an equal basis to local members?	Austraclear Yes. RITS Subject to appropriate legal and operational arrangements, the RBA would have no in-principle objection. However, each approach would be assessed on a case-by-case basis. CHESS Domestic - Yes International - Not currently, however the issue is being reviewed.
5.	Does (do) the securities system(s) allow foreign market participants to become direct participants?	Austraclear Yes. RITS Yes, subject to establishment of appropriate banking and legal arrangements. CHESS Subject to meeting participation criteria, which include a local establishment requirement.