ASX participants, vendors and users are advised of a future change to ASX’s Single Stock option fee structure - namely a move to a tiered approach - for both ETOs and OTC (FlexClear™) option contracts. The proposed go-live date for the change is Monday 5 April 2021.

The move to a tiered fee model is being introduced on the back of strong market feedback and support for a change to the pricing structure on Single Stock options. Option stocks now range in price from under $1 to over $300, and ASX believes that a more granular pricing methodology whilst fairer, also better reflects the needs of customers.

Currently, ASX has a single per contract registration fee set for ETO and OTC single stock option contracts. ASX is looking to differentiate an option’s fee to be closer aligned to the underlying’s value. The change will introduce 5 different fee categories to which an underlying can be assigned. On top of the new fee categories, ASX will be charging a registration fee of 0c for single stock options with a premium of 1c or under.

The current Large Volume Rebate scheme covering both ETOs and OTC option contracts will remain in place. However, the scheme will move from a per contract (ETOs: 10,000; OTC: 13,000) threshold to an ASX fee ($1300 excluding GST) based threshold. The rebates will still be calculated by ASX and paid after each calendar month.

* Per contract fee of $0.00 applied if option price is 1c or lower.

Each underlying will be reviewed on a 6 monthly basis and allocated to 1 of the 5 fee tiers for the next 6 months. The exception to this is if there is a significant move in the underlying’s value (E.g Corporate action such as a share split). This could result in the underlying being moved to a new fee outside of the 6 monthly cycle. ASX will notify the market in September (ahead of the October testing period) as to where stocks have been allocated. However, this is still subject to change before the official go-live in February 2021. The final allocation of which stocks will be allocated to which Fee Category will be published to market two weeks prior to go-live..

On the back of this change MCM will have the following new fee categories introduced:

• LEPOs 1
• LEPOs 2
• LEPOs 3
• LEPOs 4
• LEPOs 5
• OTC STOCK LEPOs 1
• OTC STOCK LEPOs 2
• OTC STOCK LEPOs 3
• OTC STOCK LEPOs 4
• OTC STOCK LEPOs 5
• OTC STOCK OPTIONS 1
• OTC STOCK OPTIONS 2
• OTC STOCK OPTIONS 3
• OTC STOCK OPTIONS 4
• OTC STOCK OPTIONS 5
• STOCK OPTIONS 1
• STOCK OPTIONS 2
• STOCK OPTIONS 3
• STOCK OPTIONS 4
• STOCK OPTIONS 5
• TORESS LEPOs 1
• TORESS LEPOs 2
• TORESS LEPOs 3
• TORESS LEPOs 4
• TORESS LEPOs 5
• TORESS OPTIONS 1
• TORESS OPTIONS 2
• TORESS OPTIONS 3
• TORESS OPTIONS 4
• TORESS OPTIONS 5
• WEEKLY LEPOs 1
• WEEKLY LEPOs 2
• WEEKLY LEPOs 3
• WEEKLY LEPOs 4
• WEEKLY LEPOs 5
• WEEKLY OPTIONS 1
• WEEKLY OPTIONS 2
• WEEKLY OPTIONS 3
• WEEKLY OPTIONS 4
• WEEKLY OPTIONS 5

Please note:

• There will be no change to the structure of the database but the fee category associated with each product will continue to be defined by the FeeCategory column on the DerivProd table (DProd.txt file)
• However, the fee category for any trade that has a traded price of 1c or less (<= $0.01) will be overridden by the ‘ZERO FEE’ fee category (ExchFee table/ExchFee.txt)
• Attached is a mock-up of FeeRate.pdf reflecting this information.
• Each ETO Class will be assigned its production Fee Category closer to go-live. However, ASX will provide an example of what this will look like for testing purposes.

Users should note that it is ASX’s intention for the financial impact of this change to be neutral based on ASX’s overall Singe Stock revenue calculated off historical volumes.

What do I need to do by when?

Participants and vendors should prepare to make the necessary changes in order to meet the scheduled 5 April 2021 go-live date.

An ASX participant & vendor test environment (covering both ASX Trade and DCS) is planned to be available from Monday 12 October 2020.

If you believe the go-live date is not achievable please contact either your Technical Account Manager (TAM) or Gregory Pill as soon as possible to work through the issue.

Need more information?

Issued by

Gregory Pill – Head of Equity Derivative Products

Contact information

Gregory Pill
+61 (02)  9227 0696
greg.pill@asx.com.au

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