CHESS is a computer system which electronically transfers title between buyers and sellers of securities traded on the Australian Stock Exchange (ASX).
CHESS sponsorship requires an investor to appoint an authorised agent known and a sponsor, to act on the investor's behalf. Transactions against holdings on the CHESS subregister are effected via electronic computer messages, and it is not practical for individual investors to have direct electronic access to CHESS. For this reason an individual investor may wish to be sponsored by a stockbroker such as HOLST.
The alternative to CHESS sponsorship is issuer sponsorship. Similarities between CHESS and issuer sponsored holdings are:
Both are uncertificated.
Transaction statements are issued.
Differences between CHESS and Issuer sponsored holdings are:
A Securityholder Reference Number (SRN) is assigned to each holding, whereas a CHESS holder is identified by one HIN which is common to all holding covered by one sponsorship agreement.
No formal agreement is required when Issuer sponsored.
When issuer sponsored holders wish to sell securities they provide their broker with the SRN. The broker then seeks registry authorization to transfer the securities to the broker in CHESS.
For further information about CHESS, please read the following ASX publication:
