What is the ASX?
The ASX stands for The Australian Securities Exchange. The ASX is Australia’s largest securities exchange and one of the 10 largest exchanges in the world by market capitalisation.
According to the ASX website, ‘ASX acts as a market operator, clearing house and payments system facilitator. It oversees compliance with its operating rules, promotes standards of corporate governance among Australia’s listed companies and helps to educate retail investors.’
What is CHESS?
CHESS stands for Clearing House Electronic Subregister System.
It’s a computer system operated by the Australian Securities Exchange (ASX) that facilitates the buying and selling of shares listed on the exchange and records the holders of those shares on a sub-register.
What is a CHESS-sponsored trade?
The term “CHESS-sponsored trades” has been used 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, are cleared and settled via CHESS. This includes those placed on Superhero),
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’.
What is a franking credit?
Dividends paid to shareholders by Australian resident companies are taxed under a system known as imputation. The tax paid by the company is allocated to shareholders as franking credits attached to the dividends they receive.
You are able to see your franking credits in your Dividend Statement, which can be accessed from the Reports tab of your Superhero account. You can seek advice from your accountant or tax adviser on how Franking credits may be used to reduce your tax liability for income associated with any dividends.
To be eligible for franking credits, you need to provide your tax file number (TFN) to Superhero. If you have provided your TFN to Superhero, your Dividend Statement will specify that your TFN is ‘held’. If not, please contact us to provide your TFN.
What are fractional shares?
Fractional shares are pieces, or fractions, of whole shares of a company or ETF.
For example, if you want to invest US$100 into a stock that is trading at US$500, using fractional shares you can.
You are able to place a Market Order to buy US$100 worth of shares in that company, which is a ‘fraction’ or 0.2 of a whole share.
Fractional shares are not transferable to other brokerage accounts. Not all U.S. Securities through Superhero are eligible for fractional share orders.