Apr 2, 2013 ... RESIGNATION PROCESS OVERVIEW ... ASX's resignation process . ... Until the
resignation is accepted in writing by ASX the Participant is still required to ...
under more than one rulebook this can be detailed in one letter to ASX. ...
Migration of open positions and collateral so that by the close of business ...
Overview RESIGNATION PROCESS OVERVIEW Table of Contents Introduction.............................................................................................................................................................. 1 Notice period ........................................................................................................................................................... 1 Participant’s resignation plan................................................................................................................................... 1 ASX’s resignation process....................................................................................................................................... 2 Common issues to consider .................................................................................................................................... 2 Inactivity and termination ......................................................................................................................................... 2
Introduction This information overview is to assist Participants in understanding the process and procedures in relation to a Participant resigning a permission or recognition under the following rulebooks: • ASX Operating Rules – (Rules 1600 to 1602) • ASX Clear Operating Rules – (Rule 3.10) • ASX24 Operating Rules – (Rules 1600 to 1602) • ASX Clear (Futures) Rules – (Rule 11.1) • ASX Settle Operating Rules – (Rule 4.15) • Austraclear Regulations – (Regulation 3.8) (“the Rules”) Until the resignation is accepted in writing by ASX the Participant is still required to comply with the relevant rules (whether that is maintaining the organisational competencies and resources, accessing Chess on a daily basis for the collection of messages, maintaining third party clearing arrangements, holding an AFSL etc.). Please note that the scope of this overview is limited to voluntary cessation and resignation and does not cover situations in which a Participant is subject to administration or liquidation (which are dealt with separately).
Notice period If a Participant wishes to resign as a Participant or to cease one or more permissions it must give at least 20 Business Days written notice to ASX of its intentions. The notice should contain: • • • •
The permission being resigned; The date of the resignation request; The date of the proposed resignation; and A resignation plan covering key dates and milestones of the Participant’s proposed resignation
Where a Participant is resigning under more than one rulebook this can be detailed in one letter to ASX.
Participant’s resignation plan Where a Participant is still active it is requested that along with its request to resign it will detail the steps that will be taken for the orderly winding down of its business. This can be achieved in a resignation plan which would set out the proposed date of resignation and a number of other matters, depending on the nature of the participation being resigned, which could include: • Date to cease trading/clearing and permissions concerned • Migration of any sponsored holdings and, if novated, the Participant Change Notice
2 April 2013
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ASX Operating Rules Guidance Note • Migration of open positions and collateral so that by the close of business on the resignation date, all registered contracts in the resigning Clearing Participant’s name have been closed-out or transferred (ie so there are no open registered contracts to which the they are party). • Details of the arrangements for the notification of clients and steps the Participant will take to address any potential impact the resignation may have on clients. • How the Participant will continue to supervise its business and comply with the rules. The plan effectively also ensures and illustrates how the Participant will continue to satisfy its obligations until the resignation process is completed.
ASX’s resignation process ASX’s Participant Operations area co-ordinates the resignation process internally for ASX and will discuss the timeline detailed in the Participant’s resignation plan and arrange for the cancellation of signals and equipment. A resignation may not be accepted by ASX where fees have not been paid, equipment has not been returned or there is pending disciplinary action (also refer Common issues below). The Annual Participant Fee will continue to be payable even though a Participant has submitted a resignation request. Any refund is at the discretion of ASX.
Common issues to consider Note that some of the following issues may be relevant not just where a Participant is resigning but where some or all of the business is transferred to another Participant (eg a franchise operation whereby a whole office moves to another Participant). 1. Novation – client agreements for ETO and Sponsorship can be novated under the Rules and terms of the sponsorship agreement, however the clients must be given 20 Business Days’ notice. Registered Holder Collateral Cover Authorisation Agreements cannot be novated. 2. Where client agreements are novated, the original agreements must be provided to the receiving Participant. 3. HINs that are not novated will need to be terminated in accordance with the sponsorship agreement by converting any holdings to Issuer Sponsored and cancelling the HIN. 4. ETO positions can be moved to another Participant in a bulk transfer where a tripartite agreement between the two Participants and ASX Clear is first executed. However new Registered Holder Collateral Cover Authorisation Agreements will need to be signed between with the new Participant and the client (these agreements cannot be novated). 5. Pending potential disciplinary action may hold up a resignation, particularly if the matter is serious or significant. ASX will seek to deal with such matters as soon as possible, however where circumstances require an urgent resignation the provision of a bond to cover the potential disciplinary outcome may be accepted by ASX.
Inactivity and termination Where a Participant has been inactive for a defined period (generally 6 months) some rulebooks provide ASX with the power to terminate the Participant’s permission or recognition 1. In such instances a formal process would be initiated by ASX and the Participant would be given notice of ASX’s intention to terminate and the opportunity to respond to the termination within 10 days. 1
