Why CHESS is simpler and safer than it might sound

So, what exactly is CHESS?

When you buy or sell shares, CHESS is the system that automatically creates an official record showing who is the legal owner. In Australia, CHESS is used by the Australian Securities Exchange (ASX) to record shareholdings and manage the settlement of share transactions. A broker that uses CHESS (like CommSec), is “CHESS-sponsored”, meaning they are authorised to use the CHESS system on your behalf.  

It all happens quietly, safely, in the background. 

Think of it like the title to a house. A helpful way to picture CHESS is to compare it to buying a home. When you buy a property, your name goes on the title. That’s the evidence that the home legally belongs to you. CHESS works the same way for shares. Instead of a paper title, CHESS holds a digital record that says: These shares belong to you. That’s it.  

Do you need to "manage" CHESS?

In short, no, it’s automatic. One misconception is that CHESS is another thing you need to set up, learn or maintain. CHESS sponsorship is automatically applied to all newly opened CommSec Share Trading Accounts. CHESS works in the background. When you open a CHESS sponsored account, you’re allocated a Holder Identification Number (HIN), that’s just the system’s way of keeping track of your holdings.  

All new CommSec Share Trading Accounts opened after 30 November 2024 are automatically opted in to receive electronic CHESS holding statements and notifications. When a new account is opened, CHESS will send the account owner an ASX CHESS Statement Portal Registration email. The owner will need to complete this registration to access the portal, where they can find copies of current and historical CHESS holding statements and notifications. If you already have an existing account open before the above date, and you want to move to CHESS statements: 

• Log into CommSec 
• Navigate to Portfolio 
• Select holdings 
• Click “View of Edit Account Details” link located at the top right of the page 
• Select your CHESS statement presences and save changes 

Once you have opted in, you will receive multiple notifications from CHESS: 

• An ASX CHESS Statements Portal registration email 
• An email confirming a change in communication preferences 
• A printed notification mailed to your postal address confirming the change. 

What is a share registry? 

A share registry differs from a share broker. An example of a share registry is Computershare. Share registries are appointed to maintain the official record of shareholders. Share registries are responsible for dividends, voting, annual reports and make direct contact with shareholders. Shareholders often have a relationship with both, using the broker to buy or sell and the registry to manage personal details. 

Why CHESS matters and why CommSec uses it

CHESS protects ownership and gives you confidence that what you buy is genuinely yours. CHESS also provides security, transparency, and efficiency. This includes the ability to track portfolios, manage dividends, and easily transfer shares between brokers. Not every broker uses CHESS, and not all platforms hold your shares directly in your name. So, for some investors, CHESS sponsorship offers security. 

Unlike custodial models (where the custodian, third party entity holds the legal title to securities on your behalf), CHESS-sponsored shares are registered in your name directly on the ASX sub register. If your broker fails, your shares are safe because they are not held by the broker. 

What if I have issuer sponsored shares? 

If you own shares and didn't use a broker (e.g. you purchased them in an IPO or as part of an employee share plan), your shares are very likely "Issuer Sponsored" and can be tracked by an SRN (Securityholder Reference Number) instead of a HIN. If you want to transfer issuer sponsored shares into CHESS sponsored shares (with a broker like CommSec), you'll need to transfer the shares from the share registry over to CommSec. You can transfer shares online by logging into CommSec, navigating to Settings, Service Request, Transfer shares and complete the steps. (Please note the Address details of the two accounts must be a 100% match, character for character to enable the transfer). 

Are international shares included? 

No, CHESS only applies to ASX-listed securities. 

The bottom line: CHESS is simply a record of share ownership – nothing more. 

The Academy is intended to provide general information of an educational nature only. Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. Investing carries risk.