What is CHESS sponsorship?
The Clearing House Electronic Subregister System (CHESS) is used by the Australian Securities Exchange (ASX) to keep a record of who owns what shares.
When you buy shares with a CHESS Sponsored broker, your ownership of those shares is recorded with the ASX directly.
This list was last checked on 3 September 2024.
- CMC Invest
- Selfwealth
- Commsec
- HSBC
- Westpac
- Stake
- Moomoo
- Tiger Brokers
- Saxo Markets
With all the share trading platforms on the market, finding the right broker can be difficult.
But in Australia, there's an additional consideration of whether to choose CHESS or a custody model.
If you are considering signing up to a broker, Finder, using our proprietary algorithm, has come up with a list of CHESS-sponsored brokers worth considering.
How we selected the best CHESS-sponsored brokers
We use our proprietary algorithm in order to give each trading platform a score.
Set up by Finder's data scientists and investment experts, our algorithm takes into account broker fees, trading tools, educational resources and the list of available stock markets on each platform.
Our methodology to select the best CHESS-sponsored brokers rated platforms on the following features:
- Availability of ASX CHESS-sponsored equities (Y/N filter)
- Availability of shares, ETFs, IPOs and mFunds
- Order types offered including market order, stop loss and other conditional orders
- Research tools including broker ratings, PE ratios, dividend tracking and tax reporting features
- Brokerage fees for Australian shares and ETFs
- Platform fees including withdrawal fees and inactivity fees
- Availability on desktop and mobile
- Average user rating
Important: Bear in mind, there's no trading platform that's best for everyone as all our needs are different. What's best for you might not be best for someone else. However we hope this guide can help you to narrow down your options, regardless of your trading style or level of experience. If you're looking for more details, see our full methodology here.
Our top pick for best CHESS-sponsored broker:
5/5★★★★★ Finder score Go to siteRead review Capital at risk $0 brokerage for global stocks $0 brokerage on ASX buy orders Sophisticated research tools Our top pick for a CHESS-sponsored broker is CMC Invest. In fact, it recently took out our award for best overall trading platform. CMC offers clients a range of financial options for less. For those looking to trade CHESS-sponsored shares, they offer free brokerage on trades up to $1,000 (on the first buy order on each security, each day). Brokerage fees: ETF brokerage fees: Options: Inactivity fee: $0 Currency conversion fee: 0.60% of trade value
AU stocks: $0 brokerage (for buy orders up to $1,000) and $11 or 0.10% (whichever is greater) for all other buy and sell orders.
US stocks: US$0
UK stocks: £0
AU ETFs: $0 brokerage for trades up to $1,000 (applied to the first buy order per ETF per day). $11 fee for trades up to $10,000. $15 fee for trades equal to or greater than $15,000.
US ETFs: US$0
ASX: $33/contract
US: Not available
Other markets available: Details here
Other top CHESS-sponsored brokers:
4/5★★★★★ Finder score CompareRead review Capital at risk Flat $9.50 brokerage fee per trade No inactivity fee or subscription fee on basic account Buy CHESS-sponsored Australian shares and US shares Selfwealth is a low-cost broker that runs off a flat-fee model. This makes it incredibly appealing to those trading larger amounts of money. But the broker goes beyond just flat fees, offering investors a number of features including copy trading and stock analysis tools to help them get ahead. Brokerage fee per trade: ETF brokerage fees: Inactivity fee: $0 Currency conversion fee: 60 bps of trade value
AU stocks: $9.50 flat fee
US stocks: US$9.50 flat fee
Other markets available: Details here
AU ETFs: $9.50 flat fee
US ETFs: US$9.50 flat fee
Other markets available: Details here
4/5★★★★★ Finder score CompareRead review Capital at risk Research tools available Australian shares from $5 per trade Get stock analysis and ratings CommSec is arguably the best-known share trading platform in Australia. It is the benchmark when it comes to a number of features, including educational resources, technical analysis tools, built-in broker recommendations and, of course, CHESS-sponsored shares. Brokerage fee per trade:
AU stocks: $5.00 (up to $1,000 trade value); $10.00 (over $1,000 up to $3,000); $19.95 (over $3,000 up to $10,000); $29.95 (over $10,000 up to $25,000); 0.12% (over $25,000)
US stocks: USD$19.95 for trades up to USD$5,000; USD$29.95 for trades up to USD$10,000; 0.31% for trades above USD$10,000
USD$39.95 or 0.40% (whichever is greater)
Inactivity fee: $0
Currency conversion fee: 0.55% of trade value
3/5★★★★★ Finder score CompareRead review Capital at risk Quality research tools CHESS-sponsored stocks mFunds HSBC Invest offers a high quality trading platform for CHESS sponsored shares with plenty of research tools to keep you interested, including broker ratings, dividend search tools, technical analysis charts and a news feed. Brokerage fee per trade:
AU stocks: $19.95 per trade (up to $20,000); 0.11% for trades over $20,000
US stocks: Not available
UK stocks: Not available
Options:
ASX: $30
US: Not available
Inactivity fee: $0
Trusted major bank Global stocks Research tools You can trade ASX CHESS sponsored shares as well as global stocks using the Westpac Share Trading account. Great quality research tools and expert analysis specifically honed for Australian equities make Westpac a top contender for ASX traders. Brokerage fee per trade: ETF brokerage fees: Inactivity fee: $0 Currency conversion fee: 0.60% of trade value
AU stocks: $4.95 (trades up to $1,000); $9.95 (trades $1,000 - $3,000); $19.95 (trades $3,000 - $10,000); $29.95 (trades $10,000 - $28,000); and 0.11% of trade volume (trades over $28,000).
US stocks: USD$19.95 (trades up to USD$5,000); USD$29.95 (trades up to USD$10,000); 0.31% of trade volume (trades over $10,000).
Other markets: Details here
AU ETFs: $4.95 (trades up to $1,000); $9.95 (trades $1,000 - $3,000); $19.95 (trades $3,000 - $10,000); $29.95 (trades $10,000 - $28,000); and 0.11% of trade volume (trades over 28,000).
US ETFs: USD$19.95 (trades up to USD$5,000); USD$29.95 (trades up to USD$10,000); 0.31% of trade volume (trades over 10,000).
Other markets: Details here
4/5★★★★★ Finder score CompareRead review Capital at risk $3 brokerage fee per trade No monthly fees for basic account Buy and sell US stocks and ETFs Stake is one of the cheapest brokers on the market for those investing in ASX CHESS stocks and ETFs, charging just $3 brokerage per trade. As such, it's no surprise it makes our list. Better still, if you refer 3 friends, you can actually get free brokerage on ASX trades for a year. Brokerage fees: ETF brokerage fees: Inactivity fee: $0 Currency conversion fee: 70 pips (US$0.70 for every AUD$100 exchanged)
AU stocks: $3 (Up to and including $30,000); 0.01% (Over $30,000)
US stocks: US$3 (Up to and including $30,000); 0.01% (Over $30,000)
Other markets: Details here
AU ETFs: $3
US ETFs: US$3
4/5★★★★★ Finder score Go to siteRead review Capital at risk AI-powered charts Trade ASX, US and HK stocks Advanced trading tools Moomoo is a low-cost, feature-packed investing platform that should suit a range of investors. Its recent launch of CHESS-sponsored trading is another advantage to its offering. You can trade Australian and international stocks as well as ETFs and fractional shares for low-cost brokerage while benefiting from moomoo's extensive charting and analysis tools. Brokerage fees: ETF brokerage fees: Options: Inactivity fee: $0 Currency conversion fee: 55 pips or 0.0055 AUD/USD
AU stocks: $3 or 0.03% of transaction value (GST inclusive), whichever value is larger
US stocks: US$0.99
UK stocks: Not available
AU ETFs: $3 or 0.03% of transaction value (GST inclusive), whichever value is larger
US ETFs: $0.99
ASX: Not available
US: US$0.5 for fixed plan and US$0.35-$0.65 for tiered plan
What are HIN and CHESS?
If you have a CHESS-sponsored broker, you'll also have a HIN with it.
That is because in order to register shares in your name, the CHESS-sponsored broker must issue a Holder Identification Number (HIN).
Think of a banking account.
It is remarkably similar to this.
If you decide to change brokers, this HIN will follow you around as long as the next broker you join is also CHESS sponsored.
When you sign up to a broker, they'll either run off a CHESS-sponsored or custodian model.
A custodian model basically means the custodian is the legal owner of the shares. This means that the broker owns the shares, not you. You are still a beneficial owner though, meaning you get the same dividends and capital gains. You just don't have the voting rights of CHESS shareholders.
The upside for this model is it is usually cheaper on fees.
The downside of a custodian model is that you have less direct control over your investment and less access to your holdings. Although it is worth pointing out that the entire US system works off a custody model.
Is CHESS getting replaced?
The ASX has long planned to replace CHESS with a new clearing system. CHESS was first introduced in 1994 and has understandably struggled to adapt to the increasing demands of the modern stock market.
This replacement was slated to launch in 2021, following an aborted attempt to use blockchain technology to power the new system. However, the replacement system has been repeatedly been delayed and the ASX is still finalising the launch schedule for CHESS's replacement.1
Pros
Let's start out with the good.
- Direct ownership. With a CHESS-sponsored system lodged with the ASX, you're the legal owner of the shares because of your HIN.Your broker or trading platform simply acts as a middleman between you and the exchange. This means, if the broker happens to go under, your share ownership and the holdings themselves won't be impacted. You can simply shift your holdings over to another platform to continue trading.
- Voting rights on shares. Another handy reason to go with CHESS-sponsored shares is that you'll be offered voting rights. As a company owner, you have the right to attend general meetings and to make decisions on directors' remunerations and other key factors that drive business performance. On the other hand, custodial brokers decide whether they wish to pass voting rights onto you or not.
- Easier to switch brokers. If you decide to switch brokers, having your shares with a HIN can be incredibly handy. It typically means you'll just need to complete a 2-page online form and your shares will be sent, usually within a week. A custodian broker usually takes a little bit longer to sort out.
- Did you know: Recent Finder research found that the average share trader could save approximately $1,048 in brokerage fees a year by switching to a more suitable online broker (calculated on 7 trades per month of $1,000). You might even save money by having more than 1 platform, especially if you are investing in both Australia and internationally.
Cons
Of course, there are some downsides to choosing a CHESS-sponsored model.
- Lacks access to international markets. If you're looking to invest around the world, then the CHESS model won't help you since it is an Australian system. In fact, most of the world's largest share markets, including the US, run off a custodial model.
- Higher fees. Now this will vary greatly depending on who you actually sign up with, but custodian models can mean cheaper fees for investors. This is one of the major reasons why investors choose them over CHESS sponsorship.
- Fractional shares. Under a custodian share model, you can buy and sell fractions of shares, rather than a whole share. This can help you start out sooner especially when you're buying stocks that are hundreds of dollars per share.
- Indirect share ownership. Given you aren't the holder of the shares, the custodian broker will do the administration on your behalf.
Want to compare all your options?
Here's a comparison of CHESS and non-CHESS trading platforms available in Australia:
1 - 5 of 31
Share trading updates: September 2024
- August: Australian and US markets recovered from a sudden crash in early August to return to near all-time highs.
- July: Leading stock indices including the S&P 500 and Nasdaq-100 have hit new all-time highs as US tech stocks go from strength to strength.
- June: The first Australian Bitcoin ETF under new crypto licensing rules launched on 4 June 2024.
- May: Roaring Kitty returned to Reddit for the first time in 3 years to post a screenshot of his apparent US$116m open position on GameStop (GME), spurring another flurry of trading activity on the stock.
Disclaimer: This information should not be interpreted as an endorsem*nt of futures, stocks, ETFs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involve substantial risk of loss and therefore are not appropriate for all investors. Past performance is not an indication of future results. Consider your own circ*mstances and obtain your own advice before making any trades.
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To make sure you get accurate and helpful information, this guide has been edited by David Gregory as part of our fact-checking process.
Cameron Micallef was a utilities writer for Finder. He previously worked on titles including Smart Property Investment, nestegg and Investor Daily, reporting across superannuation, property and investments. Cameron has a Bachelor of Communication and Media Studies/ Commerce from the University of Wollongong. Outside of work Cameron is passionate about all things sports and travel. See full bio
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