What is a CHESS-sponsored trade?

The term “CHESS-sponsored trades” has been bandied around by marketing teams of various brokers but what does this term actually mean? CHESS stands for Clearing House Electronic Subregister System. Basically, it’s a computer system operated by the ASX that facilitates the buying and selling of shares listed on the exchange by managing the settlement of share transactions and recording shareholdings. 

In reality, there is no such thing as a ‘CHESS-sponsored trade’ as all trades in Australia, whether through ASX or Cboe (including those placed on Superhero), are cleared and settled via CHESS.

However, when people use the term “CHESS-sponsored,” they most likely mean that your shares are held by a market participant in your name on a Holder Identification Number, usually referred to as a ‘HIN’.