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’.
If Superhero goes out of business, what happens to my shares?
Rest assured, the shares held in your Superhero account are exclusively yours and legally cannot be accessed by anyone but you, including by any claims from creditors. As the beneficial owner of your shares, only you are able to exercise any rights attached to the ownership of those shares.
Your peace of mind is our priority and if Superhero were to discontinue its business operations for any reason, your shares could be transferred from Superhero to another broker and would continue to be held by FinClear. As an authorised sub-custodian, FinClear are required to have adequate financial resources in place to provide their services to you and afford you with the necessary regulated investor protections should anything go wrong.
