Access to ASX CHESS for Sirca members

Sirca member universities can access the ASX’s Clearing House Electronic Sub-register System, better known as CHESS, to support eligible research projects. Since 1995, CHESS has been performing two core functions for the ASX: (i) it facilitates the settlement and clearing of trades in shares, and (ii) it provides an electronic sub-register for shares in ASX listed companies.

Sirca is able to facilitate access to CHESS, for reasonable research requests, from qualified academics, within member universities. The first step is to contact Sirca in order to begin the process of describing the research goals and how these can be achieved via access to the CHESS database.

Members will appreciate that CHESS contains sensitive data where the privacy of market participants needs to be protected; any proposed access to the CHESS database must be designed therefore in such a way that the privacy of market participants is maintained, in line with ASX standards and Australian legislation. Both Sirca and ASX staff and processes will be vigilant in ensuring that the data extraction goals from CHESS are designed with this in mind.

Given this, we have agreed on a process with the ASX whereby any data extracted from CHESS is subjected to the following tests before it can be released to the researcher:

(i) “Threshold Test”

The “Threshold Test” checks that there are a minimum of 10 observations within each point for each data category. For example, if a researcher is seeking to identify the number of Super Funds who are invested in a particular stock, we will only be able to release data in the event that at least ten Super Funds are present on the sub-register for that company.

(ii) “Dominance Test”

The “Dominance Test” checks that no single observation accounts for more than 50% of the value for each data point for each data category; that no two observations combined account for more than 75% of the value of each data point for each data category; and that no three observations combined account for more than 90% of the value of each data point for a data category.

(iii) “Activity Test”

Where time series data is provided, the “Activity Test” checks that no single observation accounts for more than 50% of the absolute value of aggregate changes for the data category compared to the previous period, and that no two observations combined account for more than 75% of the absolute value of aggregate changes for the data category compared to the previous period.
Below are the categories for which holdings data can be extracted. Please also note that these are further subdivided into domestic vs foreign branches making 18 categories in total.

1. Bank.
2. Other Deposit Taking.
3. Nominees.
4. Insurance.
5. Super Funds.
6. Trusts.
7. Government.
8. Inc. Companies.
9. Individuals.
It is also worth noting the following frequently asked questions about CHESS data:

(i) Why don’t the categories sum to 100%?

Since CHESS only accounts for shares being registered on the CHESS sub-register, if a shareholder decides not to register his/her shares with the CHESS sub-register of a company after its IPO for whatever reasons, then a portion of the shares issued won’t be registered on CHESS and as a result the sum of categories may not account for 100% of shares on issue.

(ii) Why does the sum of the two categories, individual, and institutional, on some occasions exceed 100%?

A cross-listed (dual-listed) company will have shares issued in Australia as well as in at least one overseas jurisdiction. In the event that this company’s foreign issued shares are traded in Australia, they may be registered in CHESS, in addition to the domestically issued shares. In this case, working out the ownership percentage using the Australian issued shares as a denominator, may result in a percentage greater than 100% given that we wouldn’t have accounted for the foreign issued shares in arriving at the denominator value.

(iii)  Why can’t I get a complete breakdown of ownership holdings for a company from CHESS?

This source will only show ownership holdings for individuals/entities who trade. This means the holdings of entities that have not traded over the history of the CHESS data set, are not known.  A complete breakdown of ownership holdings is therefore not usually possible for larger companies. CHESS records for Woolworths, for example, would not record a key shareholder’s holdings if this entity had never traded them since the inception of CHESS.  Of course, as soon as a trade does occur, the holdings in that trading entity would be reported.  Holdings that this entity may control in other entities would remain unknown until some of these were also traded.

Australian Company Announcements / IPOs

The Australian Securities Exchange has supported Sirca since its inception, and has kindly made a broad array of its datasets available to us in order to help our mission to support academic research into the financial markets. These datasets include the feed of company announcements resulting from the ASX’s listing rules in the context of the continuous disclosure regime. As a result of this Sirca has developed an online database of ASX listed company announcements with an archive going back to 1992. This is available as an additional on-line resource called “Australian Company Announcements” for Sirca academic members and subscribers.

Sirca has developed software which exposes all available reference data for each disclosure, along with all the free text terms which appear in the bodies of the disclosures. Whilst the database is not as manually indexed as many of the offerings available from commercial providers it is nevertheless a very impressive resource in terms of enabling access to raw data.

As an example of how the database can be used, we were recently asked whether we could help with some research which was attempting to nail down the definitive listing of gold sector IPOs on the ASX for the last 5 years, along with a statement about the amount of capital raised.

Each company seeking access to the ASX needs to complete/submit a range of documentation and have these filed through the ASX ComNews service, these include prospectuses and information memoranda, along with standard ASX documentation. The ASX also issues official documents which indicate that an entity has been admitted to their official list. Using the way the ASX categorise these documents, combined with Sirca’s process of exposing the text of the disclosures it was possible to narrow down the overall list of IPOs to just those pertaining to the Gold sector. Furthermore the researcher was able to access the actual disclosures to cross check the amount of capital raised.