ASX promises cheaper trading

The Australian Stock Exchange plans to create a single body to clear and settle trades with the Australian Clearing House to consolidate trades for all asset classes. Currently, they're cleared through two subsidiaries: one for equities, warrants and fixed interest products, and another for options ands warrants.

The changes will be introduced in stages, starting early in December and finishing in March 2004. The reform may free up as much as $50 million cash which is currently held in reserve to cover defaults. Brokers will also be able to reduce their costs as they may be able to offset the risk of one asset class with an opposing risk. ASX chairman Richard Humphry said the ACH will become a “more capable and flexible counter-party – one able to better manage risks across markets”.