Short answer: Austraclear is the ASX's settlement and depository system for Australian dollar wholesale debt. Bonds issued in Australia, with ISINs starting AU, are lodged there and settle delivery-versus-payment: the bond and the cash change hands at the same moment. Of the 360 AUD bonds available through Candour Capital today, 320 settle in Austraclear and 40 were issued offshore and settle in Euroclear or Clearstream. Individual investors hold through a custodian's account, recorded as the beneficial owner and kept separate from the broker's own assets.
| Issued in Australia | Issued offshore | |
|---|---|---|
| ISIN starts | AU | XS (and others) |
| Bonds on our range | 320 | 40 |
| Settlement system | Austraclear (ASX) | Euroclear or Clearstream |
| Usual settlement | Two business days after the trade (T+2) | Set by each bond's terms, usually T+1 or T+2 |
| Median minimum on our range | A$200,000 | A$500,000 |
| Coupons | Mostly quarterly or half-yearly | Often yearly |
1. You agree a price with your adviser and receive a confirmation with the face value, price, accrued interest and settlement date.
2. You pay the settlement amount into your custody or cash account before settlement.
3. On the settlement date, the bond moves into the custodian's Austraclear account and the cash moves to the seller at the same time (delivery versus payment), so neither side is left exposed.
4. The custodian records the bond against your account, then collects coupons and the final repayment for you.
Austraclear accounts are held by institutions such as banks and custodians, not by individual investors. Your bonds sit in the custodian's account, recorded in your name, or in the name of your SMSF, company or trust, as beneficial owner. They are held for you, separately from the broker's own assets.
Offshore bonds work the same way through Euroclear or Clearstream.
General information only. It does not take into account your objectives, financial situation or needs and is not a recommendation. Investment opportunities through Candour Capital are for wholesale and professional investors only. Read the offer documents and seek professional advice before investing.