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 in this manner, while some other platforms operate under a custodian model where the platform holds them on your behalf.
How are ASX shares registered?
ASX shares held directly by a shareholder can be registered in one of 2 ways:
- Broker-sponsored (CHESS-sponsored) when bought through a broker
- Issuer Sponsored when given directly to a shareholder by the company
Broker-Sponsored (CHESS-Sponsored) 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.
These are shares that are managed by the 'stock issuer' (the company directly) via a share registry.
For example, an investor may have issuer sponsored shares in Telstra that are managed by Telstra's share registry (Link Market Services). 'Issuer-sponsored' shares can be traded via SelfWealth once they’ve been transferred to your SelfWealth HIN.
Please note: SelfWealth cannot sell issuer sponsored shares directly, they first must be transferred to Broker or CHESS Sponsored Holdings.