REVIEW OF SETTLEMENT PRACTICES FOR AUSTRALIAN EQUITIES – MAY 2008

5.  Possible Modifications to Existing Arrangements

As part of the Review, the Bank has considered a number of possible modifications to settlement arrangements that could potentially strengthen the system. These include changes to:

• the basic settlement model, including settling non-novated and novated trades separately, and moving to trade-by-trade settlement;
• the functioning of the existing batch settlement model;
• the arrangements for dealing with trades that fail to settle, including the fees that apply; and
• the transparency and disclosure of securities lending.