AUS
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Highlights
ASX to implement Building Block Method to guide clearing and settlement pricing
Annual pricing reviews and independent verification to ensure revenue alignment
First possible fee adjustment under new rules set after a defined moratorium period
The Australian Securities Exchange (ASX:ASX), listed on the ASX 200 index, has announced a forthcoming change to its pricing structure for cash equities clearing, settlement, and issuer services. This update, set to take effect from the beginning of July, follows an extensive consultation process that began the previous year, aimed at improving pricing transparency and aligning service fees with actual costs and operational.
Introduction of the Building Block Method
A central feature of the revised framework is the introduction of the Building Block Method. This regulatory pricing approach is commonly applied across infrastructure sectors and is designed to calculate a maximum allowable revenue for providing core market services. The method ensures pricing is based on the efficient cost of operations and a fair return on capital, supporting a cost-reflective fee structure.
Verification and Assurance Framework
Under the new policy, annual pricing reviews will take place, supported by independent assurance to verify the accuracy of reported costs and returns. If revenue collected exceeds the required level for delivering the services, mechanisms such as rebates, fee reductions, or into system improvements will be triggered. This process aims to maintain pricing fairness and accountability across the cash equity services landscape.
Defined Fee Review Triggers
Changes to service fees will not occur arbitrarily (ASX:ASX). The policy outlines specific conditions under which fee reviews may be initiated. These include circumstances where actual revenue diverges significantly from the revenue needed to sustain the services. Other triggers include shifts in the regulatory environment, notable structural changes within the market, or substantial variations in revenue expectations.
Timelines for Implementation
The earliest timeframe for any change in fee levels under the new pricing model is set after a predefined period, with certain exceptions permitting earlier review. This structured approach is intended to provide stability and predictability for market participants, ensuring any adjustments are made through a consultative process that includes all stakeholders.
Ongoing Review and Governance
The policy also includes a scheduled five-year review cycle, during which the pricing model and associated procedures will be reassessed to ensure continued relevance and efficiency. Additionally, any revisions to the fee framework will follow a detailed consultation phase and adhere to a fixed post-adjustment period before new changes can be again.
Next Steps in Governance
The upcoming discussion within the Business Committee is scheduled for mid-June. This meeting will precede the final approval by the boards of ASX Clear and ASX Settlement. Upon ratification, the policy is expected to guide the pricing of clearing and settlement services in a manner consistent with industry best practices and stakeholder expectations.
