This week, the ASX released the global cost benchmarking of cash equity clearing and settlement services report. The report was compiled by UK consulting firm Oxera as part of the exchange’s commitment under its Code of Practice.
Speaking at the launch of the report, Oxera partner Fod Barnes said its overall conclusion is that given the size of the Australian market, the ASX’s prices (both for retail and institutional investors) are in line with its peer group.
By creating seven ‘typical’ user groups, the report found that small hedge managers pay $3,300 in annual post-trading fees; large hedge funds pay $17,200 a year; small long-only managers pay $16,400 a year; and large long-only managers pay $168,400.
Frequent retail investors are looking at $100 a year, while infrequent retail investors (both via advice and online) pay $4 a year.
One area where Australian investors are better off than their international counterparts is the funding of the default waterfall fund, said Mr Barnes.
The ‘default fund’ exists in all central counterparty (CCP) clearing houses, he said – but in Australia it is funded by the ASX, not by the end investor.
“We think this is potentially material – because [in Australia] we've switched where the risk lies,” said Mr Barnes.
While the net saving to Australian investors is small (between 0.04 and 0.07 basis points) it is close to a fifth of the typical post-trading fee of the ‘across the board’ CCP fee that applies to all investors on the ASX, he said.
