What are the benefits of using a custodian?
At Superhero, we could follow the legacy brokers and use the system the ASX is desperately trying to replace. Instead, we carefully selected a custodian model to serve our customers better. Here’s why:
- Low pricing and transparent fees: We’re all about keeping things affordable and our fees in plain sight. By adopting the custodian model, we strip out unnecessary ASX fees that other brokers may choose to pass onto you in one way or another. We’re committed to offering a clear and sustainable fee structure from the start.
- Reducing communication overload: We understand that frequent investors can receive an overwhelming amount of communication containing their holding details from CHESS—sometimes up to 50 letters a month! With Superhero, we manage and consolidate these communications on your behalf, giving you a hassle-free, paper-free investing experience.
- Globally recognised model: Having a custodian is the globally-accepted operating approach used by most Australian superannuation funds but also by other reputable market players like IG Markets, Interactive Brokers, Spaceship, Pearler Micro and Stake (for U.S. shares).
- Compliant with U.S. operations: U.S. shares cannot be held in your name under a “CHESS-sponsored” arrangement as CHESS is an ASX-only system. Therefore, a custodian is used to safeguard your U.S. shares while offering you the full benefits of ownership.
- Seamless participation in corporate actions: Superhero can facilitate your participation in company offers directly. If you’re an eligible shareholder, we’ll promptly deliver the offer information to your email inbox for you to participate in things like share purchase plans and entitlement offers.
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. |
There are three ways to hold shares in Australia.
One is through a broker which allocates your shares to a Holder Identification Number, or ‘HIN’, commonly referred to as “CHESS-sponsored”.
Another is through the registry of the company you own shares in, where you will hold shares on a Shareholder Reference Number or ‘SRN’.
Or, you can do so via a custodian, which is a financial institution licensed to hold assets on your behalf for safekeeping. It’s like having a guardian for your shares that is holding regulatory capital in the event of any potential financial stress, which is there to protect your investments.
If Superhero goes out of business, what happens to my shares?
Rest assured, the shares held in your Superhero account are exclusively yours and legally cannot be accessed by anyone but you, including by any claims from creditors. As the beneficial owner of your shares, only you are able to exercise any rights attached to the ownership of those shares.
Your peace of mind is our priority and if Superhero were to discontinue its business operations for any reason, your shares could be transferred from Superhero to another broker and would continue to be held by FinClear. As an authorised sub-custodian, FinClear are required to have adequate financial resources in place to provide their services to you and afford you with the necessary regulated investor protections should anything go wrong.
