CHESS-sponsored investing on Stake

Stake ensures that the ASX shares you own are in your name. Each investor is given their own Holder Identification Number (HIN) by our sponsoring broker Finclear. Every position in your portfolio is then attributed to this HIN. This is achieved through the Clearing House Electronic Subregister System (CHESS), which was developed and is maintained by the Australian Securities Exchange (ASX).

The CHESS system facilitates trades, settles funds following buys and sells and transfers legal ownership. Most importantly for our investors, CHESS-sponsored brokers like Stake allow positions to be held in an individual’s name.

The main benefit of the CHESS-sponsored system is security giving you direct access to your shares. Other brokers may hold shares on their own balance sheet and only attribute rights to a position, rather than full ownership. This is known as a custodian model and means shares are not immediately attributable to an owner. Should custodian brokers face the risk of an unlikely shutdown, there may be delays before shares are returned to owners.

There have been a number of well-known failures of Australian custodian brokers where investors either went through significant anxiety and in some cases only received a small amount of their investments.  Such examples were MF Global (Man Financial), Opes Prime and more recently with Halifax.

When trading under a HIN, you are protected from this and you can seamlessly move portfolios from one broker offering CHESS sponsorship to another.   Read more about portfolio transfers here.