The Australian Stock Exchange (ASX) has welcomed the introduction in Federal Parliament of legislation that would enable Commonwealth government securities to be cleared and settled electronically.
The Commonwealth Inscribed Stock (CIS) Amendment Bill, introduced on 23 August, will modernise the regulation of government-backed securities by removing regulatory barriers to the electronic issue and transfer of these securities, including treasury notes and treasury bonds.
ASX's clearing system Chess, which has operated since 1994, is used by brokers to settle their clients' securities transactions, and has enabled the replacement of share certificates by electronic account keeping. The original CIS legislation, passed in 1911, did not allow for the possibility of non-paper securities.
If approved by Parliament, this new legislation will enable all government-backed securities to be handled through Chess.
Richard Humphry, ASX managing director and chief executive officer, says: "This is great news for investors and for the nation. Investors will soon be able to gain easy access to the most secure form of interest-bearing securities - those guaranteed by their own government."