Understanding how Australian investment markets operate can help investors make informed decisions and better manage their investments. Our Investor Resources provide practical guidance on the administration of listed investments, settlement processes and investor obligations.
Understanding The Australian Investment Market
Investing extends beyond selecting investment opportunities. Understanding how listed investments are held, settled and administered forms an important part of the investment process. This resource centre explains many of the practical aspects of investing in Australian listed securities, helping investors better understand market processes, ownership structures and ongoing investment administration.
CHESS Sponsorship & HIN
The Clearing House Electronic Sub register System (CHESS) is the settlement system used by the Australian Securities Exchange (ASX) to record ownership of CHESS-sponsored securities and facilitate settlement of listed investment transactions.
Investors holding securities through CHESS are allocated a unique Holder Identification Number (HIN), which identifies their CHESS-sponsored holdings under a participating broker.
Understanding CHESS sponsorship and HINs helps investors understand how their listed investments are recorded and transferred within the Australian market.
Understanding ASX Settlement
Buying and selling listed investments involves more than simply executing a trade.
Following execution, transactions proceed through the settlement process, where ownership transfers between buyer and seller and payment is exchanged.
Understanding the settlement process helps investors appreciate how Australian listed securities are transferred and recorded following each transaction.
Trading & Settlement
Australian listed investments are generally traded through licensed market participants before being settled through established market infrastructure.
Understanding how trades are executed and settled provides investors with greater confidence in how listed investments are bought, sold and transferred.
Corporate Actions
Listed companies regularly undertake corporate actions that may affect existing investors.
These may include:
- Dividend payments
- Share Purchase Plans
- Rights Issues
- Bonus Issues
- Capital Returns
- Share Consolidations
- Company Mergers
Understanding these events helps investors recognise how corporate decisions may influence their investment holdings.
Dividends
Many listed companies distribute a portion of their profits to shareholders through dividend payments.
Understanding dividend payment dates, franking credits and dividend reinvestment plans (DRPs) can assist investors in managing their listed investments more effectively.
Tax Statements
Investment income may generate taxation reporting obligations.
Depending on the investment, investors may receive annual taxation statements, dividend statements or distribution summaries to assist with preparing their tax affairs.
Investors should seek independent taxation advice appropriate to their individual circumstances.
Share Registries
Listed companies appoint share registries to maintain shareholder records and administer investor communications.
Understanding the role of share registries helps investors manage their listed investments more efficiently.
Share registries assist investors with services such as:
- Updating contact details
- Managing dividend payment instructions
- Tax File Number (TFN) elections
- Dividend Reinvestment Plans
- Corporate action elections
- Holding statements
