CHESS (Clearing House Electronic Sub-Register System) is the system used by the Australian Securities Exchange (ASX) to record shareholdings and manage the settlement of share transactions.
Investors that have bought 'CHESS Sponsored' shares are the full legal and beneficial owner of those shares. Shares bought through SelfWealth operate under this manner, while some other platforms operate under a custodian model where the platform holds them on your behalf.
How are shares registered?
Shares held directly by a shareholder can be registered in one of 2 ways:
- Broker or CHESS Sponsored when bought through a broker
- Issuer Sponsored when given directly to a shareholder by the company
Broker Sponsored or CHESS holdings
Broker sponsored or CHESS sponsored shares are allocated a Holder Identification Number (HIN) by the broker. All shares bought via the broker will be held under the HIN number allocated to the investor. Investors are able to have more than one HIN at different brokers.
Shares that are broker sponsored must be sold via the broker that has allocated the HIN or the shares. If you wish to sell the shares via another broker, the shares would need to be transferred to the other broker before the shares can be sold.
Issuer Sponsored Holdings
These are shares that are managed by the issuer (the Company directly) via a share registry.
An investor may have issuer sponsored shares in Telstra that are managed at the share registry, Link Market Services. Issuer sponsored shares can be traded via SelfWealth once they’ve been transferred to your SelfWealth HIN.
IMPORTANT: SelfWealth cannot sell issuer sponsored shares directly, they first must be transferred to Broker or CHESS Sponsored Holdings.