ASE Annual Report 2015 | Quarterlytics

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FY2015 Annual Report · ASE

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T h e H e a r t o f A u s t r a l i a ’ s F i n a n c i a l M a r k e t s

Annual Report 2015

C O N T E N T S

02 | Letter from the Chairman and the CEO

04 | Operating and financial review

1 2 | Regulatory environment and market structure

14 | Customer engagement

1 5 | Environment, social and governance

18 | Corporate governance

26 | Remuneration report

36 | Statutory report – Directors’ report

39 | Statutory report – Financial statements

67 | Key financial ratios

68 | Transaction levels and statistics

7 1 | Shareholder information

73 | Directory

W H O W EA R E

ASX operates at the heart of Australia’s financial
markets. It is among the world’s top 10 exchange groups
and is a global leader in A$ and NZ$ financial markets.

We are a fully integrated exchange
across multiple asset classes – equi-
ties, fixed income, derivatives and
managed funds.

We service retail, institutional and
corporate customers directly and
through Australian and international
intermediaries.

We provide services that allow
our customers to invest, trade and
manage risk. These include listings,
trading, post-trade services, tech-
nology, and information and data
services.

We operate and invest in the infra-
structure that promotes the stability
of Australia’s financial markets and
is critical for the efficient functioning
of the nation’s economy, economic
growth and position in the Asia
Pacific region.

We advocate for regulations that
support end-investors, grow and
promote the integrity of the market,
and strengthen Australia’s global
competitiveness.

More information about ASX can be found at
www.asx.com.au

The Annual General
Meeting of ASX Limited
will be held in the ASX
Auditorium, lower ground
floor, 18 Bridge Street, Sydney,
on Wednesday 30 September
2015 at 10am
(Australian Eastern
Standard Time)

ASX Limited ABN 98 008 624 691

F I N A N C I A L H I G H L I G H T S

617.6

610.4

617.4

658.3

700.7

FY11

FY12

FY13

FY14

FY15

E A R N I N G S P E R S H A R E
C E N T S

• EPS 205.7 cents per share, up 3.6%

• Underlying EPS 208.4 cents per share, up 5.0%

4
8
9
1

8
0
0
2

6
0
9
1

6
4
9
1

5
5
9
1

5
8
9
1

7
.
5
0
2

4
8
0
2

P R O F I T A F T E R T A X
$ M I L L I O N

• Statutory profit after tax $397.8 million, up 3.8%

• Underlying profit after tax $403.2 million, up 5.2% driven by revenue growth

3
2
5
3

6
6
5
3

2
9
3
3

2
6
4
3

2
8
4
3

2
3
8
3

8
.
7
9
3

2
3
0
4

FY11

FY12

FY13

FY14

FY15

• Statutory profit • Underlying profit

D I V I D E N D S
C E N T S P E R S H A R E

• Final dividend 95.1 cents per share fully franked, up 5.8%

• Total FY15 dividends 187.4 cents per share, up 5.2%

• Payout ratio 90% of underlying profit after tax

FY11

FY12

FY13

FY14

FY15

• Reported EPS • Underlying EPS

• Interim • Final

93.085.182.389.995.190.292.887.988.292.3FY15FY14FY13FY12FY11OPERATING REVENUES$MILLION •Segment operating revenues $700.7 million, up 6.4%

Dear fellow shareholder,

Financial performance

Letter from
the Chairman
and the CEO

On behalf of the Board of ASX Limited (ASX), we
are pleased to present our 2015 Annual Report.

ASX operates at the heart of Australia’s financial
markets. In recent years, we have made significant
investments to strengthen our risk management
capabilities, introduce new products and services,
and ensure we remain competitive in a changing
global marketplace. In 2015 we again made good
progress towards delivering on these objectives.

ASX’s financial performance in 2015 was positive.
The Group reported underlying net profit after tax
of $403.2 million, up 5.2% on the previous year.
Underlying profit excludes a restructuring charge
of $7.7 million booked in the second half. Statutory
profit after tax was $397.8 million, up 3.8% on the
previous year.

FY15
$ million
700.7

Variance %
fav/(unfav)
6.4

Income statement1
Operating revenues

Operating expenses

EBITDA

Underlying profit after tax
Significant items (net of tax)

(160.1)

540.6

403.2
(5.4)

397.8
Statutory profit after tax
1 Based on the Group’s segment reporting.

(4.2)

7.1

5.2
-

3.8

Operating revenues rose 6.4% to $700.7 million.
Revenue performance was driven by attractive
growth in ASX’s Listings, Cash Markets, Technical
Services, Information Services and Austraclear
businesses.

Revenues from ASX’s Derivatives and OTC Markets
business declined. During the first half of the year,
ASX implemented fee reductions in the business
that impacted on revenues by $17.8 million in FY15,
which was partially offset by the removal of some
rebates. The fee changes improve the alignment of
ASX with its largest customers and are an impor-
tant investment in the long-term sustainability of
the derivatives business.

Operating expenses increased by 4.2% to $160.1
million and capital expenditure was $44.4 million.
Both were in line with the guidance given at the
beginning of the year.

ASX determined total dividends for the year of
187.4 cents per share, up 5.2%. ASX continued to
pay out 90% of its underlying profit in dividends.

More detail on ASX’s financial performance is
included on pages 5 to 7.

Rick Holliday-Smith
Chairman

Elmer Funke Kupper
Managing Director and Chief Executive Officer

ASX Annual Report 2015 | Letter from the Chairman and the CEO

In 2015, ASX made further progress on each of its
key strategic themes.

Global leader in A$ and
NZ$ financial markets

ASX is a leader in Australia’s equities and deriva-
tives markets.

In equities, the company continued to invest in its
execution services that help end-investors navi-
gate a fragmented marketplace, where multiple
exchanges and dark pools operate. These innova-
tions give customers more choice and control, and
helped ASX maintain a market share of on-market
trading of approximately 90%.

In derivatives, the main focus continued to be on
the interest rate market where the changing regu-
latory environment is having a significant impact
on exchanges and their clients. The investments
ASX has made in recent years provide Australia
with an attractive suite of products and clearing
services that are globally competitive. In addition
to its own investment program, ASX acquired 49%
of Yieldbroker in FY15, a business that operates an
electronic market for Australian and New Zealand
debt securities and interest rate derivatives.

Investment supermarket

ASX aims to bring the broadest suite of investment
options to Australian investors. The foundation
for this strategy is an attractive listings franchise
with more than 2,200 listed entities. In FY15, there
were 120 new listings and a total of $88.9 billion
of capital was raised on ASX.

ASX is working to broaden the asset classes that
are available to investors through its platforms
and to reduce reliance on its traditional ‘shares’
franchise. These include international equities,
government bonds, corporate bonds, exchange-
traded funds, listed investment companies and
managed funds.

“We have made
significant investments
to strengthen our
risk management
capabilities, introduce
new products and
services, and ensure
we remain competitive
in a changing global
marketplace.”

World-class, globally connected infrastructure

In February 2015, ASX announced that it would
upgrade all of its main trading and post-trade
technology platforms. Phase 1 of the program
will replace ASX’s equities and derivatives trading
systems. The program will improve the ability of the
exchange to innovate and bring products to market
quickly, make it easier for clients to connect to ASX
and reduce their internal operating costs. This
technology transformation is now underway with
support from ASX’s clients and industry partners.

Outstanding customer service

In FY15, ASX took further steps to deliver on its
commitment to customer service. It now operates 12
forums that allow customers to provide input on the
investment priorities for key markets and services.
In April 2015, ASX opened its 24-hour Customer
Support Centre, integrating the operations, tech-
nology and market surveillance teams that oper-
ate Australia’s financial markets. The Customer
Support Centre is located in ASX’s Australian
Liquidity Centre, which brings together more than
100 customers and service providers that are critical
to Australia’s financial markets ecosystem.

Regulations that support
growth and end-investors

ASX continues to be an advocate for regula-
tions that support end-investors and strengthen
Australia’s global competitive position.

Australia’s market regulations are positive. In
the equity market, the regulations put in place
by ASIC help prevent end-investors from being
materially disadvantaged by market fragmenta-
tion. As a result, the concerns that exist in some
overseas markets about high frequency trading do
not currently exist in Australia.

During FY15, the Council of Financial Regulators
reviewed the market structure for clearing of cash
equities. ASX is currently the sole provider of this
service and believes it is the right model for a
market the size of Australia.

ASX has recommended that the current market
structure be retained for a further five years. This
would give ASX certainty to proceed with a signif-
icant investment in Australia’s equities clearing
and settlement infrastructure, including a ‘once
in a generation’ replacement of CHESS. If the
current model is retained, ASX has also commit-
ted to implement a new clearing fee schedule that
would provide savings to its clients.

Board renewal

In February 2015, ASX continued its board renewal
program, welcoming Ms Yasmin Allen as a non-ex-
ecutive director. Yasmin has brought strong busi-
ness and risk management skills to the Board. She
will stand for election at ASX’s Annual General
Meeting on 30 September 2015.

A Government decision in relation to the review is
expected soon. The current moratorium on compe-
tition in cash equities clearing remains in place until
a decision is announced.

Ms Jillian Segal will leave the Board on 1 September
2015 after 12 years. Jillian helped guide the
company through an exciting and at times challeng-
ing period. She leaves a proud legacy, and the Board
and management thank her for her stewardship.

In the derivatives market, the regulations are more
global in nature. The strong support from ASX
shareholders for the capital raising ASX conducted
in mid-2013 positioned the company to meet the
higher global standards. During FY15, ASX was one
of the first exchanges to be granted regulatory
recognition by the European Securities and Markets
Authority. ASX was also the first to obtain an
exemption from the US regulator, the Commodity
Futures Trading Commission, to provide certain
clearing services to US bank branches.

ASX appreciates the significant effort from ASIC
and the RBA to ensure that the Australian regu-
latory regime is both world-class and recognised
by overseas regulatory agencies.

We thank all ASX employees for their commitment
and hard work during the year, and we are grateful
to our shareholders for your support.

ASX recognises that its position at the heart of
Australia’s financial marketplace comes with
responsibility. We strive to earn our privileged
position every day.

The Board and management look forward to 2016
with confidence and enthusiasm.

Employer of choice in financial markets

Rick Holliday-Smith
Chairman

To be globally competitive ASX needs to invest in
its skills base and people. In 2015, ASX recruited a
number of new senior executives who bring strong
international financial market expertise.

ASX conducts a staff survey each year. In 2015
there was an increase in staff engagement and
alignment with the long-term strategy of ASX.
This improvement follows a three-year investment
in customers, products, services and capabilities.

Elmer Funke Kupper
Managing Director and Chief Executive Officer

ASX Annual Report 2015 | Letter from the Chairman and the CEO

Operating
and financial
review

The Operating and Financial Review outlines ASX’s
activities, performance during the year, financial
position and main business strategies. It also
discusses the key risks and uncertainties that
could impact on ASX and its subsidiaries (together
referred to as the Group) and its ability to achieve
its financial and other objectives.

Primary markets – capital formation
Capital formation is the process that brings
together, in one marketplace, organisations that
require capital and those that provide it. ASX,
through its Listing Rules and infrastructure,
provides a facility for companies to list, raise capi-
tal, and have their securities publicly traded.

Business model and operating environment

ASX is a multi-asset class and vertically integrated
exchange group, and ranks in the top 10 exchange
groups globally when measured by market capital-
isation. It operates markets for cash equities and
derivatives, and provides a full service offering
including listings, trading, clearing, settlement,
registry, and information and technical services.
ASX operates a significant part of the infrastructure
that supports Australia’s financial markets.

The business is conducted through a number of
regulated legal entities. ASX holds market operator
licences and clearing and settlement licences to
undertake its activities. ASX is subject to over-
sight by the Australian Securities and Investments
Commission (ASIC) and the Reserve Bank of
Australia (RBA).

ASX services companies and other issuers that list
equity and debt securities on the exchange, as well
as a wide range of retail and institutional investors
that invest in and trade those securities. Many of
ASX’s services are provided through intermediar-
ies including stockbrokers, Australian banks and
Australian-based international banks. Clients of
these intermediaries include retail and corporate
investors, asset managers, custodians and other
financial market participants.

While ASX’s operations are primarily based in
Australia, the Group services both domestic and
international customers and some of its services
are accessible from offshore.

ASX’s diversified business model is typical of large
exchange groups operating in the Asia Pacific.

The Group provides a range of services to issuers of
capital, including the generation of security holding
statements and other shareholder and sub-register
services. At 30 June 2015, there were 2,220 issuers
on ASX. Along with the shares of listed companies,
ASX lists debt securities (including government
debt securities) and exchange-traded funds.

ASX also provides its mFund settlement service to
access unlisted managed funds.

The Group earns revenue from listed entities for
initial listing, annual listing, secondary capital rais-
ings, and for issuer services. The main drivers of
revenue in this category include the:

• number of listed entities and their market

value

• number and value of initial public offerings

(IPOs)

• level of corporate actions, such as secondary
capital raisings and mergers and acquisitions

• level of retail trading activity and the resulting

number of holding statements

• number and value of managed funds utilising

mFund.

ASX faces competition for listings from other
exchanges both domestically and internationally.
There are also non-public means of raising capital,
such as private equity funds, which can compete
with the ASX primary market.

New methods of raising equity capital, such as
crowd funding, are under active consideration by
the Australian Government and regulators to assist
start-up businesses that are not able to access
established equity markets or private equity funds.

Secondary markets – trading services
The Group operates two licensed markets to facil-
itate the buying and selling of exchange-traded
securities:

• cash market – trading of cash market securi-

ties including equities (shares), equity options,
warrants, exchange-traded funds and listed debt
securities. At 30 June 2015, there were 77 trad-
ing participants, many of which provide inter-
mediary broking services to end-investors. The
value of turnover transacted on the ASX market
is the primary revenue driver. There is compe-
tition in trading from another equity market
operator and off-market trading facilities, which
are often referred to as ‘broker dark pools’

• derivatives – trading of futures and options
on futures on interest rate, equity index,
agricultural and energy contracts. At 30 June
2015, there were 50 trading participants and
approximately $48.4 trillion of notional value
was traded during the year. The volume of
contracts traded is the primary revenue driver.
Competition comes from offshore exchanges
and over-the-counter (OTC) products.

ASX provides information and technical services to
its clients to support their secondary market activ-
ities. Information services include the provision of
real-time market data for the cash and derivatives
markets, company news, and index and other refer-
ence data. The main revenue driver is the number
of end users accessing real-time market data.

Technical services consists of four main categories
of services to facilitate market connectivity and
access to ASX and third-party services by custom-
ers. These are:

• liquidity access via ASX platforms

• community and connectivity services including
a secure low latency communication network
via ASX Net

• application services including terminals and

smart order routers

• hosting of customer hardware within the ASX

Australian Liquidity Centre (ALC).

ASX Annual Report 2015 | Operating and financial review

Revenue drivers for each category consist of the
volume of services used by customers, such as
the number of connections to ASX markets or the
number of cabinets hosted in the ALC.

Post-trade and other services
ASX’s clearing and settlement infrastructure
provides critical risk management services to
financial market participants and investors. ASX’s
post-trade operations are backed by significant
Australian-based capital and collateral, and are
overseen by Australia’s regulators.

Clearing
ASX provides central counterparty (CCP) clearing
services to the cash and derivatives markets. It
does this through the operation of two licensed
subsidiaries, ASX Clear and ASX Clear (Futures). As
CCPs, the clearing subsidiaries become the central
counterparty to every trade and assume the credit
risk of each ASX clearing participant. In effect, they
become the seller to every buyer and the buyer to
every seller. This process is known as novation. The
CCPs undertake these risk management activities
for exchange-traded and certain OTC transactions.
The main revenue drivers for clearing services
are the value of equity securities and number of
derivatives contracts novated and centrally cleared.

Cash equities settlement
ASX’s settlement services help reduce counterparty
and systemic risk, and provide transaction effi-
ciency and certainty for end-investors. Settlement
occurs on a delivery-versus-payment (DvP) basis
and involves the exchange of cash for physical
delivery of securities.

Cash market settlement is conducted through the
Clearing House Electronic Sub-register System
(CHESS). This system registers the title (ownership)
of shares and held $1.6 trillion of securities at 30
June 2015. ASX’s model for cash market settle-
ment maximises efficiency through the netting of
settlement obligations in each individual security
and the netting of all payment obligations, while
minimising the risk of settlement failure (known
as DvP model 3). The main driver of settlement
revenue is the number of settlement messages.

ASX is currently the sole provider of clearing and
settlement services for Australia’s cash market.
ASX clears and settles transactions undertaken
on another licensed market through a Trade
Acceptance Service, allowing the seamless clear-
ing and settlement of these transactions alongside
ASX transactions. ASX also facilitates settlement
of certain OTC transactions.

In 2015 the Australian Government asked the
Council of Financial Regulators to review the
market structure for the clearing of Australia’s cash
market. At the date of this report no announcement
had been made by the Government on the outcome
of that review.

Austraclear
Austraclear provides settlement, depository and
registry services for debt securities and cash trans-
actions. ASX’s model for debt securities settles
transactions on a trade-by-trade basis, which
provides for certainty of settlement (DvP model
1). The number of transactions is the main revenue
driver.

Depository services are provided through the
Austraclear Central Securities Depository (CSD),
which held $1.8 trillion of debt securities at 30 June
2015. These securities consist of fixed income secu-
rities such as asset-backed securities, Australian
government bonds and semi-government bonds.
Settlement of transactions on these securities
occurs through real-time gross settlement (RTGS).
The value of securities held is the main revenue
driver.

Registry services are provided whereby Austraclear
facilitates security registration, the holding of
relevant documentation and the subsequent
cash transfers associated with the terms of the
individual securities. The main drivers of registry
revenues are the number and value of securities
held in the registry.

The ASX Collateral service allows customers of
ASX to utilise collateral held in Austraclear as an
alternative to cash, to meet obligations to other
customers or to ASX’s clearing subsidiaries. With
increasing regulatory requirements and higher
compliance costs, the service adds value by reduc-
ing the cost of collateral for market participants.
ASX earns revenues for this service based on the
value of collateral lodged.

Following is a discussion of the contribution of
each of the above services to the Group’s segment
revenues and a review of the Group’s operations
over the financial year.

Review of operations

Investment in Yieldbroker Pty Limited
(Yieldbroker)
On 28 November 2014, ASX acquired a 49%
non-controlling shareholding in Yieldbroker,
an entity that specialises in operating licensed
electronic markets for trading Australian and
New Zealand debt securities and interest rate
derivatives. The investment complements ASX’s
exchange-traded services and provides an oppor-
tunity to improve infrastructure and efficiencies for
the Australian market. The carrying value of the
investment as at 30 June 2015 was $65.7 million.

Standard & Poor’s credit ratings
ASX Limited and its two central clearing subsidi-
aries have been assigned a long-term credit rating
of AA- and short-term rating of A-1+ by Standard
& Poor’s (S&P). The ratings outlook from S&P for
all entities is stable.

Results of operations

The Group’s profit after tax for the year ended 30
June 2015 increased by 3.8% to $397.8 million.
Excluding a restructuring charge to support the
technology transformation program and other
organisation changes (classified as significant
items), underlying profit after tax was $403.2
million, up 5.2% on the pcp. A summary income
statement in line with the Group’s segment note
follows:

$ million
Operating revenues

Operating expenses

EBITDA

Depreciation and
amortisation

EBIT

Interest and
dividend income

Underlying profit
before tax
Tax expense

Underlying profit
after tax
Significant items
after tax

Statutory profit
after tax

FY15
700.7

(160.1)

540.6

FY14
658.3

(153.6)

504.7

(38.6)

(33.8)

502.0

470.9

71.9

70.7

573.9

541.6

(170.7)

(158.4)

403.2

383.2

(5.4)

397.8

383.2

Variance %
fav/(unfav)
6.4

(4.2)

7.1

(14.3)

6.6

1.8

6.0

(7.7)

5.2

3.8

Earnings per share
The Group’s earnings per share (EPS) in FY15 were
205.7 cents (FY14: 198.5 cents). The increase in EPS
of 3.6% resulted from higher earnings. Underlying
EPS was 208.4 cents up 5.0% on the pcp.

Dividends
ASX paid an interim dividend of 92.3 cents per
share and Directors have determined a final divi-
dend of 95.1 cents per share. Total dividends per
share of 187.4 cents are 5.2% higher than the prior
year, and reflect higher earnings.

The Board’s dividend policy is to pay 90% of
underlying earnings after tax. This is reviewed
each time the Board considers payment of a divi-
dend. Underlying earnings (NPAT) are results from
operations adjusted for any significant revenues
or expenses such as those associated with major
restructuring or transactions.

ASX Annual Report 2015 | Operating and financial review

Operating revenues

Operating revenues in FY15 increased 6.4% to
$700.7 million. All major revenue categories grew
compared to the prior year, other than Derivatives
and OTC Markets which was impacted by fee reduc-
tions in electricity and interest rate contracts.

The following table depicts the contribution to
operating revenues from ASX’s various business
activities. The percentage contribution of each
category is further illustrated in the pie chart and
reflects ASX’s diversified business mix.

Revenue category
Listings and
Issuer Services

Cash Market Trading

Cash Market Clearing

Cash Market Settlement

Derivatives and
OTC Markets

Information Services

Technical Services

Austraclear

Other revenue

FY15
$ million

FY14
$ million

Variance %
fav/(unfav)

176.6

154.9

13.9

35.5

47.1

42.6

33.1

43.1

41.1

206.2

207.7

73.7

57.3

45.3

16.4

68.8

52.9

41.1

15.6

7.4

9.2

3.6

(0.7)

7.0

8.3

10.4

4.8

6.4

Total operating revenues

700.7

658.3

Operating Revenues Mix

Other
Revenue
2%

Austraclear
7%

Technical
Services
8%

Listings and
Issuer Services
25%

Information
Services
11%

Cash
Market
Trading
5%

Cash
Market
Clearing
7%

Derivatives and
OTC Markets
29%

Cash Market
Settlement
6%

Commentary on operating revenues for the various
business activities is provided below. Details of
transaction levels which drive a large portion of
ASX’s revenues are contained on pages 68 to 70
of this report.

Listings and Issuer Services – $176.6 million,
up 13.9%
In FY15, there were more new listings and an
increase in the amount of capital raised as depicted
in the following chart.

Cash Market – $125.2 million, up 6.7%
Cash Market revenue includes fees for trading,
clearing and settlement of ASX-quoted securities
including equities, debt securities and exchange-
traded funds. The total value transacted per
day across all exchanges and broker platforms
in Australia increased 13.9%. The daily average
value traded on and reported to ASX is shown in
the following chart.

Capital Raised ($ Billion)

88.1

ASX Daily Average Value ($ Billion)

88.9

5.3

66.0

50.6

46.4

4.7

4.2

4.0

4.4

FY11
Secondary Capital

FY12

FY13
IPO Capital

FY14
Scrip-for-Scrip

FY15

FY11

FY12

FY13

FY14

FY15

On-market

Trade Reporting

• Initial listing revenue – up 17.1% to $20.9

• Trading revenue – up 7.4% to $35.5 million. The

million. There were 120 IPOs during the year,
compared to 107 in the prior year. IPO capital
raised was $38.9 billion, up from $27.7 billion
in the prior year. In FY15, listings were from a
range of industry sectors, with 30 listings from
the technology sector.

• Annual listing revenue – up 13.9% to $70.7

million. There were 2,220 entities listed on the
ASX at 30 June 2015 (30 June 2014: 2,192).
Increases in market capitalisation combined
with fee changes were the main drivers
supporting the increase in revenue.

• Secondary capital raisings revenue – up 11.0%
to $42.7 million. The increase in revenue is due
to a 30.2% increase in the amount of secondary
capital raised to $50.0 billion.

• Issuer services revenue – up 19.0% to $33.3
million. The increase in revenue resulted
primarily from growth in the number of CHESS
holding statements, up 11.1%, and corporate
action revenue.

increase in revenue resulted from:

- higher on-market trading of $3.8 billion per

day, up 15.9%. ASX’s share of on-market trad-
ing averaged 89.7% in FY15 (FY14: 90.6%)

- increased trading through Centre Point and
the auction process, both of which attract
higher fees. Centre Point value traded was
$74.9 billion, representing 7.8% of value
traded (FY14: 7.4%). Trading through the
auction process represented 20.0% of value
traded. Together these accounted for 47.9% of
ASX trading revenue

- an 18.0% decline in trade reporting (ie trades
executed off-market and reported to ASX),
compared to FY14. These transactions incur a
much lower fee than on-market trading

- partially offsetting the revenue benefit from
higher volumes was an increase in the partici-
pant trading rebate to $2.5 million. No rebate
was paid in FY14.

• Clearing revenue – up 9.2% to $47.1 million
due to the total value novated and cleared
increasing 17%. The participant clearing rebate
increased by $3.2 million to $3.6 million in
FY15.

• Settlement revenue – up 3.6% to $42.6 million.
The number of main settlement messages was
up 3.6% compared to FY14. The participant
settlement rebate increased by $1.0 million to
$1.2 million.

The above rebate schemes in aggregate totalled
$7.3 million in FY15. These schemes will continue
to operate until the Government has announced
its decision on the future market structure for
clearing cash equities. The rebates will cease at
the end of the quarter following the Government’s
announcement. A five-year extension to the current
market structure would mean that ASX will provide
fee reductions of $7.3 million per annum, based on
FY15 cleared value.

Derivatives and OTC Markets – $206.2 million,
down 0.7%
Derivatives revenue includes revenue for trading
and clearing of futures and options, and clearing
of OTC interest rate derivatives.

• Equity derivatives – up 10.9% to $24.6 million.
Equity derivatives include single stock equity
and index options. The increase in revenue was
due to lower rebates compared to the prior
year, driven in part by a change in mix between
different categories of users and a change
in the mix of products. Traded volumes were
down by 3.3%.

• Futures – down 2.1% to $181.6 million. Futures
include exchange-traded futures and options
on interest rate, ASX SPI 200 index, commod-
ity and energy markets, and ASX’s OTC deriva-
tives clearing service.

Activity in futures increased 7.0% with a total of
126 million contracts traded, as illustrated in the
following chart.

ASX Annual Report 2015 | Operating and financial review

Futures and Options on Futures Volume (Million)

116

118

126

103

FY11

FY12

FY13

FY14

FY15

The decrease in revenue was driven by fee reduc-
tions in electricity derivatives from 1 July 2014
and interest rate derivatives from 1 October 2014.

The new fee schedule improves the alignment
of ASX with its customers and creates a more
sustainable business.

The below chart reflects the revenue movement
in FY15. A revenue increase of $14.6 million from
increased volumes was partially offset by higher
proprietary trading rebates. Fee reductions of
$17.8 million were partially offset by the removal
of other rebates.

Impact of Fee Changes on Futures Revenue ($Million)

14.6

(7.4)

(17.8)

6.7

185.5

FY14

Volume &
Product
Mix

Higher Prop
Trader
Rebates

Fee
Reductions

Removal
Other
Rebates

181.6

FY15

Information Services – $73.7 million, up 7.0%
The increase in revenue was mainly the result of a
fee restructure, which increased institutional data
royalties and reduced retail data royalties.

Technical Services – $57.3 million, up 8.3%
Technical Services facilitates market connectivity
and access for customers to ASX and third-party
services.

• Liquidity access – up 8.3% to $31.0 million.

Over the year, the total number of ALC service
connections increased from 622 to 679.

• Community and connectivity – up 6.4% to

$16.4 million, attributed to the growth in users
of ASX technical services provided at the ALC
and through its data networks.

• Hosting – up 19.1% to $6.9 million. In FY15, the

number of customer cabinets hosted in the ALC
increased from 142 to 188.

• Application services – down 1.5% to $3.0

million. The number of terminals decreased
during the period from 318 to 277.

Austraclear – $45.3 million, up 10.4%
Austraclear revenue increased as follows.

• Transaction revenue – up 2.0% to $16.5 million
due to a change in mix. Transaction volumes
declined by 1.9%.

• Holdings revenue – up 5.4% to $6.7 million. The
value of securities held increased 11.5% to $1.8
trillion in FY15.

• Registry and other revenue – up 19.5% to $22.1
million. The number of debt issuances regis-
tered was up 10.6% on the prior year.

Operating expenses

Underlying operating expenses (excluding finance
costs, depreciation and amortisation, and signif-
icant items) increased 4.2% to $160.1 million. In
addition, ASX incurred $7.7 million in restructuring
costs to support the technology transformation
program and other changes in the organisation.
These costs consisted mainly of termination costs
to realign skills under the new structure.

Operating expenses
Staff

FY15
$ million
96.4

FY14
$ million
92.4

Variance %
fav/(unfav)
(4.4)

Occupancy

Equipment

Administration

Variable

ASIC Supervision
Levy

Underlying
operating expenses

13.7

24.0

17.2

5.1

3.7

14.3

23.0

16.3

4.3

3.3

3.9

(4.0)

(5.5)

(17.3)

(13.9)

160.1

153.6

(4.2)

The increase in staff costs resulted from the annual
remuneration reviews as well as higher incentives
and recruitment. The average full-time equivalent
(FTE) headcount decreased from 534 in FY14 to
524 in FY15. As at 30 June 2015, ASX employed
515 FTE staff.

Other operating costs increased 4.1% to $63.7
million due to higher equipment and administra-
tion costs associated with the new service offer-
ings. CHESS holding statement production costs
increased.

Depreciation and amortisation expenses increased
14.3% to $38.6 million. This was due to the
increased capital investment in new services, as
well as ongoing technology maintenance and a
refresh of existing platforms.

Capital expenditure
The Group incurred $44.4 million of capital expend-
iture during the year, compared to $43.2 million
in FY14. Capital expenditure related to a range
of business initiatives including development of
a 24-hour Customer Support Centre, upgrades to
other core infrastructure and normal maintenance
programs.

A portion of this expenditure related to the
Group’s technology transformation program that
was launched in the second half of the year. This
program will see ASX upgrade all of its main trading
and post-trade platforms over the coming three
to four years.

Net interest and dividend income
Net interest and dividend income increased 1.8% to
$71.9 million. Net interest consists of two compo-
nents: interest earned on ASX’s cash balances and
net interest earned from the investment of collat-
eral balances lodged by participants.

Interest income on ASX’s cash balances declined
5.7% to $26.9 million as a result of lower interest
rates.

Net interest earned from the investment of partic-
ipant balances increased 3.1% to $32.3 million. This
increase was driven by a 7.5% increase in average
collateral balances to $4.1 billion, offset by a lower
investment earnings rate.

Dividend income from ASX’s shareholding in IRESS
Limited increased 17.5% to $12.7 million.

ASX Annual Report 2015 | Operating and financial review

Financial position

At 30 June 2015, the net assets of the Group were
$3,759.7 million, up 2.4% from 30 June 2014.

A summary balance sheet is presented below.

30 June
2015
$ million

30 June
2014
$ million

Variance
%

4,879.0

5,015.6

(2.7)

2,317.6

376.8

485.2

250.5

425.1

8,058.6 8,008.8

3,886.2

3,986.1

412.7

351.8

4,298.9

4,337.9

3,027.2

526.3

206.2

480.9

162.8

3,759.7

3,670.9

50.5

14.1

0.6

2.5

(17.3)

0.9

9.4

26.7

2.4

Assets
Cash and
available-for-sale
financial assets

Goodwill

Investments

Other assets

Total assets

Liabilities
Amounts owing to
participants

Other liabilities

Total liabilities

Equity
Capital

Retained earnings

Reserves

Total equity

The following major balance sheet items contrib-
uted to significant movements in assets and liabil-
ities during the year.

Investments – up $126.3 million or 50.5%
Investments reflect ASX’s 19.2% shareholding in
IRESS Limited (IRESS), a listed entity providing
financial market and wealth management technol-
ogy solutions, and the acquisition of a 49% share-
holding in Yieldbroker Pty Limited, an unlisted
entity operating licensed electronic markets for
trading a range of debt securities.

The increase in the value of the IRESS investment
was primarily related to the appreciation in the
IRESS share price. The investment in IRESS was
valued at $311.1 million and the investment in
Yieldbroker (acquired 28 November 2014) was
valued at $65.7 million as at 30 June 2015.

Amounts owing to participants – down $99.9
million or 2.5%
As part of its clearing operations, the Group holds
collateral lodged by participants to cover cash
market and derivatives exposures including OTC
transactions. These balances change based on the
level of open positions and margin rates.

The decrease in participant balances results in
a corresponding decrease in cash and availa-
ble-for-sale financial assets, as the balances are
invested by ASX.

Regulatory and market structure
developments

The financial market structure and regulatory
requirements have a significant impact on the
way ASX manages its operations and its business
strategy. The regulatory environment is discussed
on pages 12 to 13.

Business strategies and prospects for
future financial years

ASX revenues are driven predominantly by activity
levels in Australia’s financial markets. In FY15, 72.5%
of revenues were derived from primary, secondary
and derivatives market activity (Listings and Issuer
Services, Cash Markets and Derivatives).

The level of market activity is impacted by a number
of factors, including general economic conditions.
In addition to activity levels, ASX’s strategies may
be impacted by existing or new competitors both
domestically and globally. In this context, the ASX
strategy is to support the global competitiveness
and growth of Australia’s financial markets, and
to invest in new services that investors and inter-
mediaries value.

The key elements of the ASX strategy are to:

• be a global leader in Australian and New

Zealand dollar financial markets

• expand the range of products and services to

intermediaries and end-investors

• provide world-class, globally connected finan-

cial infrastructure

• deliver an outstanding customer experience.
ASX advocates regulatory settings that support
investors and growth, and is committed to being
recognised as an employer of choice in financial
markets.

Following is a discussion of key strategic develop-
ments in each business. The key drivers of revenue
in future financial years will continue to be those
noted in the business model and operating environ-
ment section of this report, as well as the success
of the business strategies discussed below.

Listings and Issuer Services
The Listings and Issuer Services strategy comprises
three main elements.

Improve Australia’s attractiveness as a
market to list and raise capital
ASX has implemented a range of initiatives over
the past few years to maintain and enhance the
attractiveness of Australia as a place to list and
raise capital. These include greater capital rais-
ing flexibility for small and mid-size companies,
improved reporting, and a reduced timetable for
rights issues.

ASX has a particular focus on increasing the
number of New Zealand companies listed on the
exchange and on growing the technology sector.
There were 30 technology IPOs in FY15 and a total
of 131 technology companies were listed on ASX
as at 30 June 2015.

Develop an investment
supermarket of products and services
In order to give the broadest choice to customers,
ASX is expanding the range of products and asset
classes available for issuers and investors. Some of
the products that complement traditional equities
include:

• government bonds – ASX provides the ability
for clients to trade small parcels of Australian
Government bonds on the exchange in the
same way as equity trading

• corporate bonds – ASX supports govern-

ment initiatives to promote and expand the
Australian corporate bond market

• exchange-traded products (ETPs) – in recent
years ASX has focused on increasing the
number and range of ETPs. There are 140 ETPs
listed on ASX totalling $18.5 billion

• managed funds (mFund) – mFund allows inves-
tors to apply for and redeem unlisted managed
funds using their broker platform. There are
101 funds available on mFund through 11
brokers

• international equities – ASX is seeking regu-
latory approval to provide access to equities
listed on offshore markets.

Provide efficiencies to issuers and investors
‘ASX Evolve’ is a program of initiatives to improve
the connection between investors and companies
listed on the exchange. The program includes an
equity research scheme that supports small and
mid-cap companies. In FY15, it delivered a redesign
of company information on the ASX website. ASX
also organises investor briefings in Australia and
overseas that lift the exposure of small and mid-cap
companies to investors.

Cash Market
ASX competes domestically with another market
operator, as well as operators of non-exchange
venues (commonly referred to as dark pools) for
trading in ASX-listed securities. ASX performed
well in a competitive equity trading market, with
a market share of 89.7% of on-market traded value
during the year.

ASX Annual Report 2015 | Operating and financial review

ASX’s strategy is to continue to innovate in the
provision of services to maximise the attractive-
ness of trading on ASX, and to meet the needs of
a varied customer base.

During FY15, ASX improved alignment with its
customers when it introduced a new tiered fee
schedule for clients who trade interest rate futures
and clear OTC derivatives.

The Centre Point order type is an example where
ASX has created an innovative suite of products
following feedback from end-investors. During
FY15, Centre Point order types accounted for 7.8%
of value transacted on ASX and 18.1% of ASX’s trad-
ing revenue. The following chart shows the growth
in Centre Point activity and the new innovations
launched over the past two years.

Centre Point Value Traded ($Billion)

74.9

61.1

37.0

19.8

4.7

FY11

FY12

FY13

FY14

FY15

Dark Limit

Single Fill/MAQ

Preference

Sweep

Block

Standard

Derivatives and OTC Markets
ASX’s strategy is to be the global leader in
Australian and New Zealand dollar financial
markets. ASX will continue to develop new prod-
ucts and services, and provide flexible and cost-ef-
fective trading and clearing platforms.

In addition to increasing the products and services
available for trading, ASX has strategies designed
to attract additional users to its products. These
include enticing overseas traders by making it
easier for them to connect through ASX’s data
network (ASX Net Global). ASX is attracting a grow-
ing number of offshore traders to its derivatives
market, and in FY16 will increase its focus on the
Asian market.

The new fee schedule has attracted an increasing
amount of activity to ASX’s OTC clearing service,
with $805.9 billion of value cleared in FY15.

Information and Technical Services
ASX’s strategy is predominantly driven by the
needs of clients in equities and derivatives. These
requirements include low latency (high speed)
services to access information and ASX’s trading
platforms.

Demand for information services is impacted by the
level of activity and the number of users accessing ASX
market data. ASX also provides enterprise licences
for large users of data that offer pricing certainty to
customers along with standard monthly royalty plans.
There is an increasing trend for customers to directly
utilise data rather than access it via a vendor, and
there is an increase in electronic consumption of data
rather than via a person operating a terminal. ASX’s
services are being tailored to meet these changing
customer requirements.

ASX’s success in expanding its Technical Services
offering follows the investment in the ALC and
communications network (ASX Net). The ALC
has further capacity to offer hosting services to
customers and grow the community of financial
service providers it supports. ASX will continue to
invest in its product and service offerings in order
to become the leading provider for the financial
community.

While innovative service offerings provide further
diversification of ASX revenues, the primary deter-
minant of demand for ASX’s information will be
the underlying level of activity and the number of
users wishing to access data and trading platforms.
These depend on prevailing market conditions and
the product offering in the cash and derivatives
markets.

Austraclear
Austraclear operates on a delivery-versus-payment
basis so that customers receive efficient, secure
and guaranteed delivery of the underlying secu-
rity or cash. Registry services provide for efficient
electronic registration and record-keeping, as well
as the ability to streamline customer transactions.

The Austraclear platform also allows for cash trans-
fers in renminbi. This efficient and secure payments
mechanism provides renminbi denominated cash
transfers similar to Australian dollar cash transfers.

ASX’s strategy includes delivering collateral effi-
ciency to customers by leveraging the functionality
of Austraclear. ASX intends to expand the service as
demand grows to include equity securities collat-
eral held in CHESS.

Engagement with clients
ASX has a large and diverse customer base, includ-
ing 2,220 listed companies and issuers, and 127
participants in the cash equities and derivatives
markets. In addition, ASX provides services to other
market operators and various other specialist busi-
nesses in the Australian financial markets.

ASX has implemented a number of initiatives that
aim to build a more customer-centric corporate
culture. ASX engagement with customers extends
to other industry partners including the Australian
Financial Markets Association, Stockbrokers
Association of Australia, Financial Services Council,
Australian Council of Superannuation Investors,
Australian Custodial Services Association,
Australian Payments Clearing Association and
Australian Shareholders’ Association. These
groups represent many of ASX’s customers and
have an interest in the quality and development
of Australia’s financial markets.

ASX is the sole provider of clearing and settlement
services to the Australian equity market. Two years
ago ASX introduced a Code of Practice that sets out
how ASX will manage these services for the benefit
of all stakeholders. The Code provides for non-dis-
criminatory access to ASX’s clearing and settlement
services, creates a transparent governance model

and establishes a forum that allows a broad range
of stakeholders to provide input to ASX. The Code
is a good example of industry-led regulation that
maintains the scale and risk management benefits
of a single infrastructure while creating outcomes
that are consistent with a competitive market.

Information technology platforms
ASX’s business is highly reliant on the information
technology platforms that support its various activ-
ities. ASX’s objective is to provide stable, reliable
and innovative technology solutions that meet
regulatory standards, provide efficient connectiv-
ity for clients, and are quick to adapt to new and
changing business requirements.

In February 2015, ASX announced that it will make
a significant investment in its technology plat-
forms over the next three to four years. Phase 1
of the change program has commenced, and will
focus on switching out the equities and derivatives
trading platforms over the next 12 to 18 months.
In addition, this phase will see ASX implement
new clearing risk and market surveillance systems.

Phase 2 will focus on post-trade services, includ-
ing cash market clearing and central securities
depository services, once there is clarity on the
cash equities clearing market structure.

In June 2015, ASX joined Australia’s fintech hub
Stone & Chalk as a foundation partner. Global
investment in fintech topped $12 billion in 2014,
up from $3 billion in 2008. ASX recognises that
the global financial sector is changing at a great
pace. As the listing venue for many Australian and
international start-up companies, ASX will continue
its support of the sector through its collaboration
with Stone & Chalk.

ASX Annual Report 2015 | Operating and financial review

Risks

The Group’s operations and financial results are
subject to a number of risks. ASX has a strong track
record of managing the wide range of risks that
arise from operating and servicing Australia’s finan-
cial markets. Many of these risks are not directly
within the control of ASX. The main risks affecting
ASX include:

• the economic environment and market activity

levels

• changes to regulation and market structure

• operational risks in technology infrastructure

and processes

• clearing and settlement risk, as well as

increased capital and liquidity requirements

• investment risk on cash and other investments.

The economic environment
and market activity levels
The ASX businesses, financial position and oper-
ating results are highly dependent on the levels of
market activity. These include the number of listed
issuers, the number of new company listings, the
volume and value of financial instruments traded,
the number of settlement messages, and similar
factors. Market activity levels are significantly
influenced by economic performance, government
policy and general financial market conditions in
Australia and internationally. A slowing of economic
activity can lead to a reduction in activity and reve-
nues. ASX’s diversified business model mitigates
some of these risks, as revenues are earned from
a range of activities and services. The expansion
into new services is designed to further diversify
the Group’s revenues over time.

Changes to regulation and market structure
ASX’s businesses operate in highly regulated
markets. The business is affected by licences that
it holds, the market structure in which it operates,
and the regulations under which it and its custom-
ers operate.

Licences
Several of the Group entities hold licences to oper-
ate financial markets, such as securities and deriv-
atives exchanges as well as clearing and settlement
facilities. These licences impose obligations on
ASX to comply with a range of conditions. Failure
to meet these obligations may result in reputa-
tional damage, action being taken against the
Group, or loss of the licences. In addition to line
management, the Group has internal audit and
regulatory assurance functions, and executive and
Board oversight to monitor these risks. ASIC and
RBA provide annual assessments of the Group’s
licensed subsidiaries.

In addition, the clearing and settlement, and ASX
Compliance subsidiaries have independent boards
to oversee these operations.

The licence obligations may result in the Group
undertaking significant programs or investments in
order to meet licence conditions. These can impact
on ASX as well as ASX’s customers. ASX seeks
to manage these risks by engaging with regula-
tors and customers to achieve the best possible
outcome for Australia’s financial markets.

Market structure and competition
ASX faces competition domestically and interna-
tionally in many parts of its business. Competition
can come from other exchanges as well as non-tra-
ditional sources.

Changes to the existing financial market structure
can affect the strategic market position and perfor-
mance of ASX. An example of a change in market
structure was the licensing of another market
operator in the Australian cash equities market.

As noted under the regulatory and market struc-
ture developments section, the market struc-
ture for clearing cash equities is currently under
review by the Government. ASX is the only licensed
clearing and settlement facility for cash equities
in Australia. A single provider model is the most
efficient for a market the size of Australia. ASX
recommended that the current market structure be
retained for a further five years. On this basis, ASX

has committed to a new tiered fee schedule that
would provide an immediate reduction in clearing
fees, to strengthen the Code, including requiring
regulatory review of future fee proposals, and to an
upgrade of clearing and settlement infrastructure.

In some of its businesses, ASX is facing competi-
tion from overseas financial markets. Decisions by
Australian or overseas regulators can impact on
ASX’s relative competitive position. For example,
regulators have implemented location require-
ments for certain systemically important services.
Changes to these requirements can impact on
Australia’s and ASX’s competitiveness. ASX makes
significant investments in its business to ensure
that Australia continues to have world-class finan-
cial markets. ASX’s strategy is to provide a globally
competitive service offering in all of its businesses.

While changes to the market structure are outside
the control of ASX, the company actively provides
input to regulators and policymakers.

Regulations that affect ASX and its customers
Regulations can impact on the way ASX provides
its services and the attractiveness of its services to
customers. Changes to domestic or international
regulations can pose risks to ASX. From time to
time, new regulations may provide opportunities
for ASX to offer new services to its customers.
The development of ASX’s clearing service for
OTC derivatives arose from changing international
regulations.

During the year, ASX’s clearing subsidiaries
received European regulatory equivalence and
US CFTC regulatory clearance, allowing ASX to
offer services to participants regulated by those
jurisdictions.

Regulations may change over time and may require
ASX to change the capital and liquidity it provides
in support of the Group’s clearing and settlement
activities. Changing regulations also impact on
the level of capital and liquidity ASX customers
are required to hold in order to undertake their
business through ASX. These changes can lead to
customers undertaking less activity through ASX. In

some instances, regulations may also benefit ASX
by providing capital efficiencies to customers who
transact through licensed exchanges such as ASX.

Regulations may also impact on the investment
strategy that ASX adopts in relation to capital
and collateral balances held to support its licensed
clearing and settlement activities. Changes in regu-
lations over time may impact on earnings gener-
ated by the investing of these balances.

The Group manages the risks from changing regu-
lations by active engagement with regulators,
policymakers and customers. As regulatory
settings, particularly international, are outside
the control of ASX, changes may impact on ASX’s
business.

Operational risks in technology
infrastructure, procedures and processes
The Group operates a number of technology
platforms that facilitate trading, clearing and
settlement. Due to the complexity of and the high
reliance on this infrastructure, operational inci-
dents can impact on the functioning of markets
and have a financial impact on ASX. Given the
nature of ASX’s business, clients and other third
parties connect to ASX via its ASX Net proprietary
network and to the ASX website. This exposes the
Group to cyber security risks.

The Group seeks to reduce these risks by invest-
ing in its underlying infrastructure, maintaining
an understanding of trends in technology and
cyber security, and entering into strategic rela-
tionships with specialist technology providers.
The infrastructure and operations are subject to
regulatory oversight, and ASX has backup recovery
infrastructure and processes to reduce the impact
from disruptions.

The Group’s operations and responsibilities cover
a broad range of services and functions. The way
in which these responsibilities and functions are
discharged, or operational incidents or errors, can
impact on the financial performance of the Group
and adversely affect its reputation. ASX seeks to
manage operational risk by putting in place clear

ASX Annual Report 2015 | Operating and financial review

procedures, automating activities and by following
its enterprise risk framework. While these policies
assist in reducing the likelihood of events occurring,
the high volume and value of transactions on ASX
means that operational activities or incidents, or
fraudulent activity could have a significant impact
on the Group.

Clearing risk
The Group’s CCP activities expose it to credit,
investment and liquidity risk. In the event that
clearing participants encounter financial difficul-
ties, a failure to meet their contractual obligations
could result. This risk is commonly referred to as
clearing default risk and is managed by a number of
controls. These include enforcing minimum financial
and operating criteria for clearing participants,
requiring participants to provide collateral, holding
pre-funded financial resources, and maintaining
established risk policies and procedures to ensure
that the counterparty risks are monitored and
proactively managed.

Central counterparty clearing activities expose ASX
to investment and liquidity risk on participants’
collateral balances. The Group is also exposed
to investment risk on its own cash reserves. The
Group seeks to manage these risks by investing
cash with high quality counterparties, maintaining
sufficient cash reserves and marketable securities,
and regular forward planning and forecasting of
liquidity requirements. Furthermore, the Board
has implemented policies that specify concentra-
tion limits as well as maximum average maturity
limits. At 30 June 2015, the Group had $4.9 billion
invested with a range of counterparties, comprising
collateral balances and cash reserves.

The CCP pre-funded financial resources provided
by ASX, which are at risk of loss in the event of a
default, currently total $250 million in ASX Clear
and $450 million is ASX Clear (Futures). These
resources and their application are fully described
in note B1 to the financial statements.

The management of clearing risk is important to
the stability of Australia’s financial markets, as the
CCPs provide critical infrastructure for the orderly
completion of transactions. For cash equity transac-
tions, the risk is typically the period between execu-
tion of a trade and settlement; while in derivatives,
the risk is typically the daily movement in the value
of the open positions or outstanding contracts.
Collateral is called daily by the CCPs and in some
instances intra-day. Additional collateral is called
depending on market conditions and the individual
exposures of clearing participants.

ratings and invests with counterparties with a
minimum S&P short-term rating of A1.

New Financial Stability guidelines will impact
on ASX’s investment strategy for clearing house
capital and cash collateral lodged by participants.
The new guidelines will result in a reposition-
ing of the portfolio over the next two years into
largely secured assets. As a result, earnings from
the investment of cash collateral are expected
to decline over time. The impact in FY16 is not
expected to be material.

ASX has investments in IRESS and Yieldbroker
($376.8 million at 30 June 2015). The value of these
investments is subject to change based on market
conditions and the performance of each entity. A
significant decline in their financial performance
may result in a loss to ASX as the value of the
investment would be reduced. In addition, ASX has
$2.3 billion of goodwill recognised on balance sheet.
The carrying value of this asset may be impacted
if the financial performance of ASX deteriorates.
Details of the carrying value and analysis of possi-
ble impairment are contained in note C1 of the
financial statements. There have been no impair-
ments recognised on these assets to date.

Settlement risk
ASX settles equity and debt instrument transac-
tions on a delivery-versus-payment basis. As such,
it facilitates the orderly exchange of securities
for cash. Settlement errors expose the Group to
potenital financial and reputational impacts. On
average, the Group settled $4.3 billion of equity
securities and $62.6 billion of debt instruments
daily through its settlement facilities.

The Group manages settlement risk by a range of
measures, including setting out rules and processes
for settlement to occur and having infrastructure
(IT platforms and processes) in place to conduct
the settlement process.

ASX plans to change the settlement cycle for cash
equities from T+3 to T+2 in early 2016. This reduces
risk by requiring settlement of equity transactions
to occur two days after trade compared to the
current three days. T+2 settlement operates in a
number of global markets.

Investment risk
ASX is exposed to counterparty risk in the event
an investment counterparty fails, such as a bank
or issuer of financial instruments. At 30 June 2015,
ASX had approximately $3.9 billion of cash collat-
eral invested with a range of counterparties. In
addition, it had approximately $1 billion of Group
cash invested, much of which supports clearing
and settlement activities. Investment earnings on
the Group cash is impacted by the level of interest
rates and is also subject to the risk of investment
counterparty default. ASX utilises public credit

ASX Annual Report 2015 | Operating and financial review

Regulatory
environment
and market
structure

ASX operates in a highly regulated, globally
competitive environment. International capital
markets are increasingly connected, and regula-
tors around the world are implementing global
standards to achieve systemic stability. Australia’s
regulatory settings are recognised as consistent
with these international standards.

Australia’s regulatory environment

ASX is a global leader in Australian dollar equities
and derivatives products. It is focused on deliv-
ering services that make it easier for customers
to connect to liquidity in a cost-effective way.
ASX’s ability to do so is supported by the work
of the two government agencies that oversee
ASX’s operations: the Australian Securities and
Investments Commission (ASIC) and the Reserve
Bank of Australia (RBA).

ASIC is responsible for the supervision of real-
time trading on Australia’s domestic markets and
sets market integrity rules to govern whole-of-
market activity. ASIC annually assesses market,
and clearing and settlement facility licensees on
compliance with their licence obligations. The latest
ASIC Market Assessment Report concluded that
ASX met its obligations.

The RBA is responsible for assessing whether
licensed clearing and settlement facilities have
complied with the Financial Stability Standards
(FSS) and have done all other things necessary
to reduce systemic risk. RBA annually assesses
whether ASX is complying with the FSS. The latest
RBA Assessment concluded that ASX observed or
broadly observed all relevant requirements.

The RBA is the chair and ASIC is a member of
the Council of Financial Regulators (CFR). CFR
is the coordinating body for Australia’s financial
regulatory agencies. The other members are the
Australian Prudential Regulation Authority and
The Treasury. CFR works in collaboration with the
Australian Competition and Consumer Commission.

Consistency with global standards

In December 2012, the RBA published its FSS,
which it uses to assess whether licensed clearing
and settlement facilities, including those oper-
ated by ASX, have done all things necessary to
reduce systemic risk. In October 2014, RBA issued
supplementary FSS guidance that allows ASX Clear
(Futures) and ASX Clear to provide services to
European Union clearing participants.

ASX complies with the FSS, as well as the global
Principles for Financial Market Infrastructure
(PFMIs) established by the Committee on
Payments and Market Infrastructures (CPMI)
and the International Organisation of Securities
Commissions (IOSCO). The Principles for FMI
Disclosure Framework document sets out how
ASX complies with the FSS and PFMIs.

In August 2015, ASX released its Response to
Consultation Feedback on exposure draft rules to
implement proposed loss allocation and replen-
ishment tools for clearing participant default and
non-default loss. This followed earlier consulta-
tions in October 2014 and April 2015. The new
rules are expected to take effect in late 2015, and
comply with domestic and international regulatory
requirements.

In February 2015, the Treasury released a Resolution
Regime for Financial Market Infrastructure
Consultation paper proposing legislation to estab-
lish an Australian resolution regime for central
counterparties. ASX supports the early implemen-
tation of the resolution regime.

Clearing market structure
and Code of Practice

In March 2015, ASX moved to a ‘Cover 2’ standard
for credit and liquidity risk for its cash equities
clearing business. Both ASX Clear and ASX Clear
(Futures) hold sufficient capital to withstand the
default of their two largest participants under
extreme but plausible market conditions. Each of
ASX Limited, ASX Clear and ASX Clear (Futures)
has an investment grade long-term credit rating
of AA- from Standard & Poor’s.

In February 2015, the Government announced
a review of the market structure for clearing
Australian cash equities. ASX is currently the
sole provider of this service and believes it is the
right model for a market the size of Australia. A
Government decision in relation to the review is
expected soon. The current moratorium on compe-
tition in cash equities clearing remains in place until
a decision is announced.

Recovery and resolution

An important outcome of international regula-
tory harmonisation has been the requirement to
develop recovery and resolution plans for clearing
houses such as ASX Clear and ASX Clear (Futures).
Regulators and customers have focused on the
powers of clearing houses (that act as central coun-
terparties) to address losses or liquidity short-
falls following extreme circumstances that require
replenishing their default funds (recovery); and on
a regime that would enable a public authority to
take control of a distressed central counterparty
to return it to viability or facilitate its orderly wind-
down (resolution).

ASX has recommended that the current market
structure be extended for five years. This would
give ASX certainty to invest in a ‘once in a genera-
tion’ replacement of CHESS. ASX has also commit-
ted to implement a new clearing fee schedule
that would provide savings to its clients, and to
strengthen the Code of Practice that sets out how
ASX manages the infrastructure on behalf of the
market if the current model is continued.

The Code has been operating since August 2013 and
improved transparency around pricing, financial
performance and international benchmarking of
ASX’s post-trade services for the cash market.
A number of advisory bodies have been created
under the Code that provide input on ASX’s invest-
ment in the design, operation and development of
clearing and settlement services.

ASX Annual Report 2015 | Regulatory environment and market structure

“ASX is a global leader
in A$ equities and
derivatives, and is
focused on delivering
services that make it
easier for customers to
connect to liquidity in a
cost-effective way.”

Financial System Inquiry

ESMA

In December 2014, the Government released
the final report of the Financial System Inquiry
to examine how the financial system could be
positioned to meet Australia’s evolving needs
and support economic growth. ASX endorsed the
recommendations relating to financial markets,
including the development of the corporate bond
market and the change in the national interest test
that applies to ASX’s 15% ownership cap.

Mandated clearing of OTC derivatives

In December 2014, CFR announced that the
Government will mandate centralised clearing of
Australian dollar interest rate derivatives between
internationally active dealers at the same time as
the four major global currencies. The mandate is
expected to come into effect by March 2016.

European and US OTC clearing standards

Many of ASX’s customers are headquartered in
jurisdictions that have placed conditions on where
those counterparties may clear their OTC deriva-
tives transactions. ASX, the RBA and ASIC have
worked with the regulators in those jurisdictions
to allow these customers to use ASX’s financial
market infrastructure to clear their transactions
in Australia though ASX Clear (Futures).

The European Securities and Markets Authority
(ESMA) is responsible for the implementation of the
European Market Infrastructure Regulation (EMIR)
– the EU regulation dealing with OTC derivatives,
central counterparties and trade repositories.

In April 2015, ESMA confirmed it had formally
recognised each of ASX Clear and ASX Clear
(Futures) as a ‘Third Country CCP’. ASX’s clearing
houses were amongst the first group of international
clearing houses to obtain this recognition. This will
allow EU-headquartered banking groups wishing to
clear transactions through ASX Clear or ASX Clear
(Futures) to avoid higher regulatory capital charges
that would otherwise apply to them if ASX Clear
and ASX Clear (Futures) were not recognised.

CFTC

The US Commodity Futures Trading Commission
(CFTC) is responsible for the regulation of US
futures and swaps markets. ASX Clear (Futures)
is permitted to clear proprietary swap positions
for its US clearing members.

On 18 August 2015, the CFTC issued an order of
exemption from registration as a Derivatives
Clearing Organization to ASX Clear (Futures). The
order is the first issued by the CFTC based on its
authority under Section 5b(h) of the Commodity
Exchange Act.

ASX Annual Report 2015 | Regulatory environment and market structure

Customer
engagement

ASX is positioned at the heart of Australia’s finan-
cial markets. Its clients include:

Market participants

• 2,220 companies and other issuers who list
on ASX to connect with investors and access
Australia’s capital markets

• more than 180 local and international inter-

mediaries and banks, hundreds of settlement
participants, market data vendors, and other
market operators who rely on ASX to provide
Australia’s financial market infrastructure
seamlessly every day

• institutional investors, asset managers,

superannuation funds, professional traders
and millions of retail investors who use ASX’s
financial markets to invest, trade and manage
risk.

In 2012, ASX adopted a Customer Charter that
sets out how it balances the interests of custom-
ers, shareholders, end-investors and the broader
financial markets.

Companies and issuers

In FY15, the ASX listings business progressed initi-
atives that improve efficiency and flexibility for
companies, to ensure that Australia remains an
attractive market to list and raise capital.

In addition, ASX expanded its Evolve program
to help listed companies connect with investors.
The program funds broker research and provides
a platform for listed companies to interact with
investors both in Australia and overseas. In FY15,
the program rebuilt the company information
section on asx.com.au and launched the Listed@
ASX magazine in print and online.

In FY16, ASX will replace ASX Online, its B2B digital
platform used by companies to interact with ASX.
The new portal will provide a simpler and richer
experience.

ASX has implemented a number of initiatives to
improve the customer experience for the inter-
mediaries that service investors and other users
of its financial markets.

ASX has also proposed to implement fee reduc-
tions as part of its submission to the Government’s
review of the market structure for clearing
Australian cash equities. Based on current activity
levels, the savings for equities clearing clients could
be approximately $7.3 million in FY16.

Improving the experience
ASX has established a dedicated team to
deliver an outstanding customer experience.
The team is led by a member of the Executive
Committee and brings together the main
customer-facing functions from across ASX, ensur-
ing that senior management is directly engaged in
the issues that matter most to customers.

Surveying customers
In FY15, ASX conducted its first Customer
Satisfaction Survey. While the results show that
progress has been made to improve customer
service, there is considerable room to improve
even further. Customers would like deeper engage-
ment with ASX, initiatives to reduce their costs and
improved service delivery.

This feedback will be incorporated into ASX plans
to enrich the customer experience.

Investors

ASX recognises that financial markets must meet
the needs and expectations of end-investors.

ASX advocates for market regulations that support
the interests of investors. It continues to develop
services that give investors choice and allow them
to transact efficiently. In FY15, ASX introduced
enhancements to its Centre Point execution service
based on direct feedback from investors about the
challenges of transacting in a fragmented equity
market.

Australia has one of the highest levels of retail share
ownership in the world. In FY15, ASX continued to
provide retail education services and operate the
popular Sharemarket Game. ASX also conducted
the biennial Australian Share Ownership Study that
provides a comprehensive insight into the behav-
iours, attitudes and knowledge of retail investors.

In April 2015, the Federal Treasurer opened ASX’s
24-hour Customer Support Centre. The Centre
integrates ASX’s technology, operations, clear-
ing risk and market surveillance teams to provide
end-to-end customer support.

A new Technical Account Manager team has also
been created. This team seeks to understand the
plans of ASX customers, prepare them for change,
and provide a single point of contact for any
service-related issues. This ‘high touch’ approach
is welcomed by customers who are looking for a
streamlined way to engage with ASX.

Progress on engagement
Over the last two years, ASX has broadened
engagement with intermediaries, creating 12
forums across all main businesses. These forums
discuss current market developments, provide
feedback on service delivery, and help prioritise
investment in products and services.

Fee reductions
ASX recognises the cost pressures facing its inter-
mediary customers. During FY15, ASX reduced fees
for interest rate, electricity and grains futures, and
for OTC clearing services. These changes impacted
on ASX revenues by $17.8 million and were partially
offset by the removal of some rebates. The fee
changes strengthen alignment with intermediaries
and create a more sustainable business.

ASX Annual Report 2015 | Customer engagement

Environment,
social and
governance

ASX is focused on the long-term sustainability of its
business. Environment, social and governance (ESG)
risks are monitored as part of the Board’s oversight
of ASX’s enterprise risk management framework.
This section describes how ASX addresses these
risks, and provides transparency on the manage-
ment of ASX’s environmental footprint.

Investor education

According to the most recent Australian Share
Ownership Study, 54% of investors said they will
definitely or probably buy shares in the next 12
months. This is the highest level of interest since
the GFC. Thirty-six percent of adult Australians
currently participate in the share market directly
through shares and other listed investments, or
indirectly through managed funds or self-man-
aged super.

ASX’s website provides a range of free tools and
resources to help investors understand invest-
ing, its potential rewards and risks. In FY15, more
than 180,000 online courses on shares, bonds
and hybrids, exchange-traded products, instal-
ment warrants, options, futures and Australian
government bonds were downloaded. Short form,
mobile-friendly introductory tutorials are available.
ASX’s YouTube channel features presentations from
finance industry experts. ASX’s monthly Investor
Update e-newsletter covers topics ranging from
the investment basics to strategies relevant to
more experienced investors, and has over 198,000
subscribers.

ASX produces the ASX Sharemarket Game for the
general public and secondary school students. The
Game provides an opportunity to become familiar
with the mechanics of share trading. Its link to
the live market makes it particularly effective in
connecting students to real-world events. Over
71,250 students from 1,000 schools and 41,462
members of the public played the Game last year.

Ethics and integrity

ASX’s Code of Conduct and Anti-Bribery and
Corruption, Fraud Control and Whistleblower
Protection policies promote ethical and responsible
decision-making by all directors and employees of
the ASX Group. All ASX employees must complete
periodic training on ASX policies promoting ethi-
cal behaviour, including fraud, Equal Employment
Opportunity (EEO), diversity, whistleblowing,
conflicts handling and dealing rules.

Further details are set out on page 25 of the corpo-
rate governance section of this report.

ASX people

ASX aims to build and retain a highly motivated
team of professionals with the best available skills
and experience.

The Remuneration Committee oversees and
receives periodic reports about ASX’s human
capital policies and programs. ASX’s Talent and
Diversity Council, comprising the CEO and the
Group Executive Committee, regularly reviews
talent and leadership programs, performance
management and reward processes, succession
planning outcomes, diversity strategy progress,
and staff alignment and engagement results.

Alignment and engagement
ASX measures staff alignment and engagement
through an annual staff survey. Both alignment
and engagement significantly improved in FY15.
Compared to its peer companies, ASX’s alignment
reached the top quartile and its engagement was
at the upper end of the second quartile. The
Remuneration Committee reviews the results of
the survey to assist in monitoring the culture of
the organisation.

Training and retention
A learning and development program is in place for
all levels of the organisation. Programs for emerg-
ing and senior executive leaders identify, train and
retain high potential, high performing employees.

Remuneration
ASX market positioning for fixed remuneration
is the median to upper quartile. The majority of
employees participate in a short-term incentive
(STI) plan, which is linked to their contribution to
ASX’s performance. During FY16, ASX will offer all
employees the opportunity to participate in a plan
to acquire ASX shares.

ASX’s remuneration report on page 26 describes
ASX’s approach to senior executive remuneration.

Recognition
Recognition at ASX is supported through two
programs: a non-financial peer-to-peer program
that recognises individual contributions during
the year, and a formal CEO Awards program that
rewards excellence on an annual basis.

Both programs focus on excellence in the behav-
iours critical to the Company’s long-term success:
customer impact, critical thinking and innovation,
talent culture, and action and accountability.

ASX Wellbeing
ASX Wellbeing supports staff to balance work,
personal and family life.

In FY15, ASX employees participated in the Happy
Body at Work initiative that targeted the four life-
style habits affected by a typical work environment:
sitting, moving, stress and sleep. The program
was enthusiastically received by employees and
provided a structured program to help staff change
their habits and improve their energy, resilience,
performance and general wellbeing.

Other wellbeing initiatives include yoga, pilates and
meditation classes, lunchtime sport and a walking
club. The ASX Social Committee coordinates a range
of company-funded social activities and events
throughout the year.

Workplace health and safety
ASX’s FY15 lost-time injury frequency rate (the
number of lost-time injuries per 1 million hours
worked) was 0.93. This is well below industry
benchmarks.

ASX Annual Report 2015 | Environment, social and governance

• flexible work practices – ASX has an ‘all roles
flexible’ policy. Staff may also purchase up to
two weeks additional leave

• superannuation during parental leave – ASX

continues to pay super contributions for employ-
ees throughout their entire paternity leave.

ASX is committed to the health and safety of all
employees, visitors and contractors. Employees
are encouraged to adopt behaviours that identify
and then remove or control potential causes of
workplace risk, injury and illness.

The Audit and Risk Committee receives quarterly
updates on ASX’s compliance with workplace,
health and safety (WHS) laws, standards and codes
of practice. WHS performance is audited periodi-
cally by an independent third party.

Diversity and inclusion at ASX

ASX supports a work environment where employ-
ees have equal access to career opportunities,
training and benefits.

The Remuneration Committee recommends diver-
sity and inclusion targets to the Board, and moni-
tors progress against the targets.

ASX’s Diversity and Inclusion Policy was reviewed
in FY15. ASX employees are treated with fairness
and respect, and are not judged by gender, age,
ethnicity, race, cultural background, religion, sexual
orientation, disability or caring responsibilities.

Gender equality is a strategic priority
ASX strives to make the most of its available talent
by eliminating barriers to career development and
progression for women in the organisation.

• pay equality – a pay equity audit based on the
Workplace Gender Equality Agency framework
was undertaken for the first time this year.
ASX is addressing gaps as soon as practicable.
An action plan to achieve pay equality across
the organisation is in place. It involves raising
awareness, addressing gaps over time and
eliminating bias in all remuneration decisions
at commencement, internal promotion, trans-
fer and secondment

• employee network – an internal women’s
network was established, offering career
management support programs including
recruitment, retention and development at all
levels across the organisation

• development – ASX continued to partici-

pate in the Chief Executive Women Leaders
Development Program and partnered with the
Macquarie Graduate School of Management
to sponsor female executives completing MBA
programs

• parental leave – ASX operates a 16-week paid
parental leave policy for the primary carer,
with secondary carer paid leave of four weeks

ASX’s CEO is a member of the Male Champions of
Change group committed to advancing women in
leadership positions.

ASX level
Non-executive directors

CEO

The following diversity initiatives were imple-
mented during FY15:

• accountability for gender diversity – incentives
for Group Executives and General Managers
are linked to People and Culture targets,
including staff survey results and diversity

• recruitment – ASX requires a balanced gender
shortlist when recruiting for three levels below
CEO

Group Executives (CEO -1)

General Managers (CEO -2)

Managers/Team Leaders (CEO -3)

Professional/technical

Administrative

Entire organisation

ASX Annual Report 2015 | Environment, social and governance

ASX was re-accredited as a Breastfeeding Friendly
Workplace by the Australian Breastfeeding
Association.

Prevention of harassment and discrimination
ASX addresses discrimination and harassment
through prevention and online training. On
commencement of employment, all ASX staff
complete online equal employment opportunity
training in line with the ASX Diversity Policy. ASX
has processes in place to monitor and address
discrimination, and staff must complete online
training every two years.

WGEA report
ASX lodged its Workplace Gender Equality Agency
(WGEA) Annual Report in May 2015. ASX also
submitted its application for the 2015 WGEA
Employer of Choice for Gender Equality citation.

ASX in the community

ASX assists its employees to become active
supporters of worthwhile causes and participate
in community programs outside the workplace. This
includes providing paid volunteering leave. ASX’s
community programs allow employees to support
causes and charities of their choice from a broad
list of charity partners. ASX matches employee
donations to these charity partners, with $205,145
donated to 47 charities in FY15.

ASX ThomsonReuters Charity Foundation
The ASX ThomsonReuters Charity Foundation
supports Australia-based children’s and medical
research charities by organising fundraising events
with participants from financial markets and other
industries. Key fundraising events include an annual
golf tournament, sailing regatta, gala dinner and
charity auction. Over $1.2 million was raised and
distributed to 26 charities in FY15. The Foundation’s
eight person board includes three ASX employees
or former employees.

Gender equality at Board and management level
ASX has targets to achieve female representation
on the Board and management by the end of FY16.
During FY15, ASX met its FY16 target for the Board,
and Manager/Team Leader level (CEO -3).

ASX also fulfils the company secretariat and
finance functions for the Foundation, and many
ASX employees volunteer to assist with the fund-
raising activities.

Number of
directors/
employees (at 30
June 2015)
9

Number of
women (at 30
June 2015)
3

% of
women
(at 30 June 2015)
33.3

FY16 target
female
representation
33.3

112

381

576

153

245

N/A

50+

40+

ShareGift Australia
ASX has been a supporter of ShareGift Australia
since 2007. ShareGift Australia is a not-for profit
organisation that allows shareholders to sell
parcels of shares free of brokerage costs and
donate the proceeds to charity. ASX reimburses all
ASX exchange fees on ShareGift Australia transac-
tions. ASX encourages its shareholders to support
ShareGift Australia by enclosing a ShareGift Share
Sale Donation Form with the final dividend letter
from the Chairman. ShareGift Australia has donated
over $1 million to 392 charities.

Definitions
Group Executives (CEO -1): direct reports to the CEO. Three executives at CEO -2 level have been appointed Executive
General Managers and will sit on the Executive Committee. The % of women on the Executive Committee will be 36%.
General Managers (CEO -2): executives two layers below the CEO.
Managers/Team Leaders (CEO -3): executives three layers below the CEO.
Entire organisation: includes casual staff and excludes non-executive directors and independent contractors.
Note: all data is non-cumulative and is calculated on the number of employees in each level.

During FY15, ASX launched Straight-Through-
Processing for the five most frequently used corpo-
rate actions, and the mFund settlement service to
allow investors to invest in managed funds online.
Both initiatives use automation to improve efficien-
cies and remove paper from the financial system.

Environmental indicators and initiatives

Climate change

Unit

2013 2014 2015

Direct emissions
(diesel fuel for backup
generators)

Indirect emissions
(electricity, paper, travel,
waste)

kt
CO2-e

0.30 0.07 0.03

FY15 initiatives
• ASX ’s new Customer Support Centre fit-out speci-
fications and Bridge Street lease renewal included
energy efficient requirements.

• ASX internal paper usage and CHESS statements
converted to certified carbon neutral paper under
the National Carbon Offset Standard.

Waste, water, energy Unit

2013

2014

2015

Direct emissions

44,145 49,526 52,620

Indirect emissions
(electricity, paper,
travel, waste)

2,881

1,221

435

Paper consumed

tonnes

FY15 initiatives
• Ongoing successful initiatives to reduce diesel and

gas usage at the ALC.

• Energy reduction initiatives, including:

- replacing all monitors and PCs with new devices
- implementeing virtual/energy efficient energy

server strategy

- replacing high energy consumption networking
equipment with smaller and faster switches

- upgrading to energy efficient lighting in Sydney,

Perth and Melbourne offices.

Anzac Centenary Public Fund
ASX is contributing $1 million to the Anzac
Centenary Public Fund (The Fund). The Fund,
established by the Australian Government, receives
donations to commemorate the centenary of
Australia’s involvement in the First World War
and a Century of Service. Projects honour and
improve understanding of the service and sacri-
fice of Australia’s servicemen and women, past
and present, in defending Australia’s values and
freedoms.

Environment

ASX is a service-based organisation that does
not extract physical or natural resources and
is not involved in the manufacture or transport
of products. The Group’s operations comprise
approximately 570 staff, located in a head office,
two interstate offices and two data centres.
Accordingly, ASX’s environmental footprint is small
and arises from the energy used by the offices and
data centres, and also from consumables, primarily
paper. Based on this small environmental footprint,
ASX’s environmental risks are not significant.

A growing proportion of the energy consumed
by ASX is used in the Australian Liquidity Centre
(ALC, ASX’s primary data centre) to support the
equipment and systems of customers who co-lo-
cate equipment with ASX instead of their own or
other facilities.

The number of cabinets in the ALC has increased
from 76 to 188 over the last three years. Excluding
the energy consumed by these cabinets, ASX’s
energy consumption is broadly flat over this period.

Environmental risks are monitored, assessed and
managed as part of ASX’s risk management frame-
work. ASX’s approach to managing these risks
includes: measuring the impact of its activities,
minimising consumption of materials, recycling
and re-using consumables, and supporting aware-
ness of environmental issues. A cross-divisional
Environmental Committee is in place to oversee
ASX’s environmental impact-reduction activities.

Assessment of ASX’s ESG practices

Given ASX small environmental footprint, it does
not set specific ESG targets or participate in all ESG
evaluation surveys or indices. ASX is:

• a participant in the Carbon Disclosure Project
that provides transparency on ASX’s moni-
toring and minimisation arrangements for
emissions, waste and water usage

• a constituent of the FTSE4Good Index Series
that is designed to facilitate investment in
companies that have met stringent social and
environmental criteria.

ASX is aware that its ESG practices have also been
assessed by:

The third edition of the Principles released in March
2014 gave listed entities the flexibility to make their
corporate governance disclosures on their website
rather than in their Annual Report.

The Council has also contributed to a significant
improvement in public reporting and awareness of
how listed entities manage their economic, environ-
mental, social sustainability and governance risks,
through a recommendation that this information
be included in listed entity Annual Reports.

ASX’s corporate governance framework

ASX’s approach to corporate governance is
described on the following pages.

• MSCI ESG research

• Trucost.

ASX Corporate Governance Council

The ASX Corporate Governance Council, which
was established in August 2002, has continued
to refresh the principles-based framework for
corporate governance practices – the Corporate
Governance Principles and Recommendations
(Principles) – so they continue as a relevant and
practical guide for listed entities, investors and the
wider Australian community.

The Council brings together 21 business, investment
and shareholder groups. As the convenor, ASX
nominates the chair (currently Mr Alan Cameron
AO) and provides executive support, as well as
contributing one member of the Council.

ASX requires listed entities to disclose the extent to
which they have followed the recommendations set
by the Council during the relevant reporting period.
Where companies have not followed a recommen-
dation, they must provide an explanation (‘if not,
why not’ reporting). These reporting requirements
provide for transparency of the corporate govern-
ance practices of listed companies, which better
positions investors to make informed investment
decisions.

ASX Annual Report 2015 | Environment, social and governance

Corporate
governance

ASX’s corporate governance framework

ASX’s governance arrangements have been consist-
ent with the third edition of the ASX Corporate
Governance Council’s Corporate Governance
Principles and Recommendations (Principles)
throughout the reporting period.

More information on ASX’s corporate governance
is available on ASX’s website.

This statement is current as at 20 August 2015 and
has been approved by the Board.

Delegation to committees,
subsidiary boards and Management
• The Board has established the Audit and Risk,
Nomination and Remuneration committees to
assist it to discharge its duties

• Day-to-day management and operations are

delegated to Management

• ASX Compliance monitors and enforces compli-
ance with the ASX Operating Rules under the
oversight of the ASX Compliance board

CEO, and oversees succession plans for the
senior executive team

• Oversees the effectiveness of Management
processes and approves major corporate
initiatives

• Monitors ASX’s culture

• Oversees the process for identifying significant
risks facing ASX and control, monitoring and
reporting mechanisms

Board renewal and succession planning
The Board regularly reviews its composition and
succession plans. It uses the skills matrix below to
guide its assessment of the skills and experience of
current directors, and to identify any gaps in the
collective skills of the Board.

Category
Executive
leadership

Explanation
Successful career as a senior
executive or CEO

• Enhances and protects the reputation of ASX

Strategy

• Reports to and communicates with

shareholders

• Reviews earnings and other forecasts

Financial
acumen

The responsibilities of the Board are detailed in
the Board Charter. The Board’s conduct is also
governed by ASX’s Constitution.

Risk and
compliance

Define strategic objectives,
constructively question business plans
and implement strategy

Accounting and reporting, corporate
finance and internal controls, includ-
ing assessing quality of financial
controls

Forward-looking, able to identify
the key risks to the organisation and
monitor effectiveness of risk manage-
ment frameworks and practices

Responsibilities of the Chairman
• Independent and non-executive

• The CEO may not be or become Chairman

• Leads the Board in its duties to ASX

• The clearing and settlement boards focus on

• Facilitates effective Board meeting discussion

risk management and oversight of the clearing
and settlement operations

• Charters set out respective responsibilities and
how each board or committee supports and
provides input into the other’s deliberations

Board of directors

Role and responsibilities of the Board
• Accountable for the performance of the ASX

Group

• Oversees the conduct of the ASX Group,

consistent with its licence obligations and
public policy objectives of financial market
integrity and financial system stability

• Reviews and approves the corporate strategy,

annual budget and financial plans

• Monitors financial performance

• Appoints and assesses the performance of the

• Oversees processes and procedures to evalu-
ate the performance of the Board, its commit-
tees and individual directors

Composition of the Board
• At the date of this report, there are 10 direc-
tors, whose names, skills and experience are
detailed on pages 19 to 21

• Ms Jillian Segal will retire from the Board on 1

September 2015

• Ms Yasmin Allen was appointed to the Board

on 9 February 2015

• The Board is committed to maintaining the

diversity of the Board and at least 33% female
representation

• The Board considers that individually and

collectively, the directors have an appropriate
mix of skills, experience and expertise

ASX Annual Report 2015 | Corporate governance

Public policy

Public and regulatory policy, including
impact on markets and corporations

Information/
Technology

Business
development

People and
change
management

Corporate
governance

Use and governance of critical infor-
mation technology infrastructure,
digital disruption and information
monetisation

Commercial and business experience,
including development of product,
service or customer management
strategies, and innovation

Overseeing and assessing senior
management, remuneration frame-
works, strategic human resource
management and organisational
change

Knowledge, experience and commit-
ment to the highest standards of
governance

International
exchange
experience

International financial markets or
exchange groups, including post-trade
services and relationships with finan-
cial market participants

Financial
services
experience

Broking, funds management, super-
annuation and/or investment banking
activities

The skills and experience of the Board reflects
ASX’s role as the provider of critical infrastructure
to Australia’s financial markets and its position in
the Asia Pacific region.

ASX Limited
Board

Rick
Holliday-Smith

Chairman

BA (Hons), FAICD

Elmer
Funke Kupper

Yasmin
Allen

Managing Director and CEO, Executive Director

Non-Executive Director

Master of Business Administration

BCom, FAICD

Mr Holliday-Smith was appointed Chairman of
ASX in March 2012, having been a director since
July 2006. He was previously Chairman of SFE
Corporation Limited from 1998 until 2006. He
is Chair of the Nomination Committee and a
member of the Audit and Risk, and Remuneration
Committees.

Mr Holliday-Smith is Chairman of the intermediate
holding companies of the ASX clearing and settle-
ment facility licensees.

Mr Holliday-Smith has global executive and leader-
ship experience in capital markets and derivatives,
and a background in venture capital activities.

His previous roles include CEO of futures and
options trading firm Chicago Research and Trading
(CRT), President responsible for global trading
and sales at Nations Bank-CRT (a predecessor
of Bank of America), both based in Chicago, and
Managing Director of Hong Kong Bank Limited
(a wholly owned merchant banking subsidiary of
HSBC Bank), based in London.

Mr Holliday-Smith was appointed Chairman of
Cochlear Limited in July 2010, having joined the
Board in March 2005. He has been a director of
Servcorp Limited since October 1999 and is a
Member of the Macquarie University Faculty of
Business and Economics Advisory Board.

Mr Funke Kupper was appointed Managing Director
and CEO of ASX on 6 October 2011. He is also a
director of each of the ASX clearing and settlement
facility licensees and their intermediate holding
companies.

Mr Funke Kupper is a director of the Business
Council of Australia.

Mr Funke Kupper was appointed a non-executive
director of Tabcorp Holdings Limited in June 2012.
Mr Funke Kupper was Managing Director and CEO
of Tabcorp from September 2007 to June 2011.

Prior to joining Tabcorp, Mr Funke Kupper held
several senior positions with Australia and New
Zealand Banking Group Limited, including Group
Head of Risk Management, Group Managing
Director Asia Pacific, and Managing Director
Personal Banking and Wealth Management.
Previously, he was a senior management consult-
ant with McKinsey & Company and AT Kearney.

Ms Allen was appointed a director of ASX on 9
February 2015. She is a member of the Audit and
Risk Committee.

Ms Allen is also a director of ASX Clear (Futures)
Pty Limited and Austraclear Limited, the ASX Group
clearing and settlement licensees for Australia’s
derivatives, OTC and debt markets, and their inter-
mediate holding companies.

Ms Allen has extensive financial services, strat-
egy and corporate governance experience, gained
during a career of over 20 years in finance and
investment banking.

She was formerly a vice president at Deutsche
Bank, a director at ANZ Investment Bank and an
associate director at HSBC Group.

Ms Allen was appointed a director of Insurance
Australia Group Limited in November 2004,
Cochlear Limited in August 2010 and Santos
Limited in October 2014.

Ms Allen is also a board member of the Australian
Institute of Company Directors, the George Institute
for Global Health and the National Portrait Gallery.

ASX Annual Report 2015 | ASX Limited Board

Dr Ken
Henry AC

Peter
Marriott

Non-Executive Director

BCom (Hons), PhD, DB h.c, FASSA

Non-Executive Director

BEc (Hons), FCA, MAICD

Heather
Ridout AO

Non-Executive Director

BEc (Hons)

Damian
Roche

Non-Executive Director

BCom

Dr Henry was appointed a director of ASX in
February 2013. He is a member of the Audit and
Risk Committee.

Mr Marriott was appointed a director of ASX and
Chair of the Audit and Risk Committee in July 2009.

He is Chairman of Austraclear Limited, the securi-
ties settlement facility licensee for Australia’s debt
markets, and a director of each of the other ASX
clearing and settlement facility licensees and their
intermediate holding companies.

Mr Marriott has spent over 30 years in senior
management roles in the finance industry, span-
ning international banking, finance and auditing.

Mr Marriott was Chief Financial Officer of Australia
and New Zealand Banking Group Limited from 1997
to May 2012. He also spent two years as Group
Head of Risk Management. Prior to his career at
ANZ, he was a partner of KPMG Peat Marwick
specialising in the banking and finance, and infor-
mation technology sectors.

Mr Marriott was appointed a director of Westpac
Banking Corporation in June 2013.

Dr Henry is also a director of ASX Clear Pty Limited
and ASX Settlement Pty Limited, the ASX clearing
and settlement licensees for Australia’s equity
markets, and their intermediate holding compa-
nies. He is also Chair of The Forum, the industry
advisory panel that provides input into the ongoing
development of ASX’s cash market clearing and
settlement infrastructure and services.

Dr Henry has extensive experience as an econo-
mist in Australia and overseas, and has worked
as a senior policy adviser to successive Australian
governments.

Dr Henry served as the Secretary of the Federal
Department of the Treasury from 2001 to 2011.
He is Chairman of the Advisory Council of the
SMART Infrastructure Facility at the University
of Wollongong and the Sir Roland Wilson
Foundation at the Australian National University,
and a Governor of the Committee for Economic
Development of Australia (CEDA).

Dr Henry was appointed a director of National
Australia Bank Limited in November 2011. He will
become Chairman of NAB in December 2015.

Mrs Ridout was appointed a director of ASX in
August 2012. She is a member of the Nomination
and Remuneration Committees and, from 1
September 2015, will be Chair of the Remuneration
Committee and a director of ASX Compliance Pty
Limited.

Mrs Ridout is a company director with a long
history as a leading figure in the public policy
debate in Australia.

Mrs Ridout was formerly Chief Executive of the
Australian Industry Group, a major national
employer organisation representing a cross-section
of industry including manufacturing, construction,
defence, ICT and labour hire, until April 2012.

Mrs Ridout is a member of the Board of the
Reserve Bank and was appointed Chair of the
AustralianSuper Trustee Board in May 2013,
having joined the Board in 2007. She has also been
a director of Sims Metal Management Limited since
September 2011 and a director of the Australian
Chamber Orchestra since December 2012.

Mrs Ridout’s previous appointments include
member of the Henry Tax Review panel, board
member of Infrastructure Australia and the
Australian Workforce and Productivity Agency,
and a member of the Climate Change Authority and
the Prime Minister’s Taskforce on Manufacturing.

Mr Roche was appointed a director of ASX in
August 2014.

He is also a director of ASX Clear (Futures) Pty
Limited and Austraclear Limited, the ASX Group
clearing and settlement licensees for Australia’s
derivatives, OTC and debt markets, and their inter-
mediate holding companies.

Mr Roche has 20 years’ experience in global invest-
ment banks, with extensive cross-asset class
expertise spanning the equities, fixed income and
commodities markets, with a specific focus on the
Asia Pacific region, including Australia.

Mr Roche was a member of the global Corporate
and Investment Bank Operating Committee for J.P.
Morgan. His most recent role was Head of Markets
and Investor Services Sales and Distribution for
Asia Pacific, based in Hong Kong.

ASX Annual Report 2015 | ASX Limited Board

Jillian
Segal AM

Dominic
Stevens

Peter
Warne

Non-Executive Director

BA, LLB (UNSW), LLM (Harv), FAICD

BCom (Hons)

Non-Executive Director

BA, FAICD

Ms Segal has been a director of ASX since July
2003. She will retire on 1 September 2015 after
12 years of service. Ms Segal is currently a direc-
tor of ASX Compliance Pty Limited, Chair of the
Remuneration Committee, and a member of the
Audit and Risk, and Nomination Committees.

Ms Segal has long-standing experience as a corpo-
rate lawyer, regulator and company director.

Ms Segal is a former Commissioner of the Australian
Securities and Investments Commission (ASIC),
serving as Deputy Chairman from 2000 to 2002.
She has also served as Chairman of the Banking and
Financial Services Ombudsman and as a member of
the Federal Remuneration Tribunal, the independ-
ent statutory body that considers the remuneration
of key Commonwealth officers.

Prior to joining ASIC, Ms Segal was a partner at
Allen, Allen and Hemsley (now Allens Linklaters).

Ms Segal is also a director of National Australia
Bank Limited (since September 2004), Chairman of
the Sir John Monash Foundation, Deputy Chancellor
of the University of New South Wales, a director of
the Garvan Institute of Medical Research, a trustee
of the Sydney Opera House and a member of the
Australian War Memorial Council.

Mr Stevens was appointed a director of ASX in
December 2013. He is a member of the Audit and
Risk Committee.

Mr Stevens is also a director of ASX Clear (Futures)
Pty Limited and Austraclear Limited, the ASX Group
clearing and settlement licensees for Australia’s
derivatives, OTC and debt markets, and their inter-
mediate holding companies.

Mr Stevens has broad experience working in capi-
tal and derivatives markets. He is familiar with
the challenges and opportunities presented by
Australia’s growing pool of funds under manage-
ment, and the increasing reach of global regulation.

Mr Stevens was the Chief Executive Officer and
Managing Director of Challenger Limited until
February 2012, having previously held senior roles
overseeing Challenger’s capital, risk management
and strategy.

Prior to Challenger, Mr Stevens served as a Senior
Managing Director at Zurich Capital Markets Asia
and was a Partner at Bankers Trust, where he had
responsibility for the Australian derivatives and
global metals and agricultural commodity deriv-
atives businesses.

Mr Stevens is also a director of SocietyOne Holdings
Pty Ltd.

Mr Warne was appointed a director of ASX in
July 2006. He was previously a director of SFE
Corporation Limited from 2000 to 2006. He is also
a member of the Audit and Risk, Nomination and
Remuneration Committees.

Mr Warne is Chair of ASX Clear (Futures) Pty
Limited, the ASX clearing and settlement licen-
see for Australia’s derivatives and OTC markets,
a director of Austraclear Limited, the securities
settlement facility licensee for Australia’s debt and
OTC markets, and a director of their intermediate
holding companies.

Mr Warne has over 30 years’ experience in financial
markets and brings a deep practical and technical
understanding of debt, equities and derivatives
markets, and risk management.

Mr Warne is a director of Securities Exchanges
Guarantee Corporation and NSW Treasury
Corporation, and a member of the Advisory Board
of the Australian Office of Financial Management.
He is also an Adjunct Professor at the University
of Sydney Business School and a member of the
Macquarie University Faculty of Business and
Economics Advisory Board.

Mr Warne was appointed Chairman of Australian
Leisure and Entertainment Property Management
Limited in September 2003, Chairman of OzForex
Group Limited in September 2013 and director
of Macquarie Group Limited in 2007. He was
previously Deputy Chairman of Crowe Horwath
Australasia Limited between May 2007 and
January 2014.

Director appointment and election

Before appointing a director, ASX undertakes
comprehensive reference checks including educa-
tion, employment, character, criminal history, and
bankruptcy. It is also a condition of appointment
that any new director is not a disqualified person.
Directors sign an annual declaration to this effect.

Directors are generally elected for three years.
Retiring directors are not automatically re-ap-
pointed. Any director (except the CEO) who has
been appointed during the year must stand for
election at the next AGM.

Ms Yasmin Allen will stand for election at the 2015
AGM. Mr Rick Holliday-Smith, Mr Peter Marriott
and Mrs Heather Ridout will retire by rotation and
offer themselves for re-election.

Director induction and training
New directors receive a letter of appointment. The
letter of appointment outlines ASX’s expectations
about a director’s participation, time commitment
and compliance with ASX policies and regulatory
requirements. The induction process is coordinated
by Company Secretariat.

The Board receives regular briefings at Board meet-
ings, Board workshops, meetings with custom-
ers and site visits. These assist directors to keep
up-to-date with relevant market and industry
developments.

Performance reviews
The performance of the Board, its committees and
individual directors are reviewed each year.

The Chairman holds discussions with individual
directors when evaluating their performance. This
performance evaluation took place in FY15. The
Board takes this evaluation into consideration
when recommending directors for election.

ASX Annual Report 2015 | ASX Limited Board

Director attendance at meetings

Director shareholding policy

Board committees

Details of director attendance at meetings up to 30 June 2015 are set out below. Directors also frequently
attend meetings of Board committees of which they are not members.

ASX Limited

Audit and Risk
Committee

Nomination
Committee

Remuneration
Committee

Held

Attended

Held

Attended

Held

Attended

Held

Attended

In September 2014, the Board adopted a non-exec-
utive director shareholding policy and a guideline
that directors should accumulate at least 5,000
ASX shares (12,000 for the Chairman) within three
years of their appointment. Progress is monitored
annually.

The ASX Board has established three committees:

• Audit and Risk Committee

• Nomination Committee

• Remuneration Committee.

Conflict and information
handling arrangements

Each committee is chaired by an independent
director.

ASX has put in place a comprehensive set of govern-
ance arrangements to address the potential for
actual and perceived conflicts. These encompass:

Each committee’s charter sets out its role, respon-
sibilities, composition and structure. An overview
is provided on the following page. Each charter is
reviewed annually.

Access to information, Management and advice
Directors have access to Management to request
information.

Directors are entitled, with the approval of the
Chairman, to obtain independent professional
advice relating to their role as an ASX director at
ASX’s expense.

Director remuneration

ASX’s remuneration framework is described in
detail in the remuneration report, which starts
on page 26.

• governance arrangements, including ASX

self-listing

• customers, competitors and supplier

arrangements

- licence obligations including the ‘review

party’ framework

- information handling standards.

The Australian Securities and Investments
Commission (ASIC) is ASX’s listing authority. ASIC
monitors ASX Limited’s compliance with the Listing
Rules.

ASX Compliance monitors and enforces the compli-
ance of listed entities and participants under its
various Operating Rules (including its Listing Rules).
There are specific controls regarding participants
and admitting entities to the official list. These
include Conflict Handling Arrangements to ensure
that these decisions are made without inappro-
priate intervention or interference by other ASX
business units.

Each committee reports regularly to the ASX Board
and minutes of committee meetings are provided
to the ASX Board.

The Board reviewed the membership of the
committees during the year. The current compo-
sition is set out on the following page.

In addition, ASX has established clear reporting
lines between the committees and subsidiary
boards such that:

• Board committees report to the ASX

Compliance and clearing and settlement
boards on relevant matters

• ASX Compliance and clearing and settlement
boards report to the Board and Board commit-
tees on relevant matters.

Committee composition changes
• Dr Henry and Ms Allen were appointed

members of the Audit and Risk Committee on
1 July 2015

• Mrs Ridout will become Chair of the

Remuneration Committee on 1 September 2015
following Ms Segal’s retirement.

Director Name
Rick Holliday-Smith
(Chairman)

Elmer Funke Kupper
(CEO)
Yasmin Allen1
Ken Henry

Peter Marriott

Heather Ridout

Damian Roche

Jillian Segal

Dominic Stevens

Peter Warne
1 Appointed on 9 February 2015.

Director independence

The ASX Board Policy on Independence requires
that a majority of directors are independent, and
includes guidelines for assessing the materiality
of directors’ relationships that may affect their
independence.

The Board has not set a limit on directors’ tenure. In
assessing the independence of Mr Holliday-Smith,
Ms Segal and Mr Peter Warne, the Board (without
any of the directors present) considered whether
their tenure, which for Mr Holliday-Smith and Mr
Warne included consideration of their tenure on the
Board of SFE Corporation, had impacted on their
independence. The Board noted the valuable contri-
butions of each director based on their expertise,
judgement, industry knowledge and understanding
of the ASX Group’s operations.

Each of ASX’s non-executive directors has been
assessed as independent.

ASX Annual Report 2015 | Corporate governance

Audit and Risk Committee

Nomination Committee

Remuneration Committee

ASX Compliance

Responsibilities
• Integrity of ASX Limited’s consolidated finan-

Responsibilities
• Review process for nomination and selection

Responsibilities
• Remuneration for ASX Group and non-execu-

cial reports

of directors

tive directors

• Adequacy of ASX’s corporate reporting process

• Identify desirable director competencies and

• Remuneration and incentive framework for the

• Systems of risk management, internal control
and legal compliance (except matters overseen
by the ASX Compliance or clearing and settle-
ment boards)

experience

CEO, senior executives and all staff

• Review director performance and the process

• Achievement against gender diversity objec-

for reviewing contributions

tives, including remuneration

Interaction with subsidiary boards
• Serves as remuneration committee for the

ASX Compliance and clearing and settlement
boards in relation to remuneration and perfor-
mance management of the Chief Compliance
Officer, and the Chief Risk Officer and Group
Executive Operations, respectively

• Receives input from the ASX Compliance and
clearing and settlement boards as part of the
annual performance management process for
these senior executives

Remuneration Committee members
• Jillian Segal (Chair, retires 1 September 2015)
• Rick Holliday-Smith
• Heather Ridout (Chair, from 1 September 2015)
• Peter Warne

• Review director succession plans and induction

• Internal audit oversight

programs

• External audit liaison and monitoring of perfor-

• Set and review Board gender diversity

mance and effectiveness

strategies

Interaction with subsidiary boards
• Serves as nomination committee for the

appointment of non-executive directors to the
ASX Compliance and clearing and settlement
boards

• Reports to ASX Compliance and clearing and
settlement boards about nomination matters

Nomination Committee members
• Rick Holliday-Smith (Chair)
• Heather Ridout
• Jillian Segal (retires 1 September 2015)
• Peter Warne

• Receive audit reports and approve the audit plan

• Review external auditor independence, includ-
ing considering the level of non-audit work
carried out by the external auditor

Interaction with subsidiary boards
• Receives reports from the ASX Compliance and
clearing and settlement boards about compli-
ance and risk management matters delegated
to those entities

• Serves as the audit and risk committee of the

clearing and settlement boards

• Preparation and methodology for special
purpose accounts pursuant to the Code of
Practice for Clearing and Settlement of Cash
Equities

Audit and Risk Committee members
• Peter Marriott (Chair)
• Yasmin Allen (from 1 July 2015)
• Ken Henry (from 1 July 2015)
• Rick Holliday-Smith
• Jillian Segal (retires 1 September 2015)
• Dominic Stevens
• Peter Warne

ASX’s Board relies on the ASX Compliance board
and management to:

• oversee each ASX Group licensees’ compliance,
enforcement and conflict handling obligations

• make certain compliance and enforcement
decisions delegated to it by ASX Group
licensees

• provide services to the ASX Group licensees

such that there are adequate arrangements for
enforcing (and in the case of a market licensee,
monitoring) compliance with the Operating
Rules.

The ASX Compliance board charter sets out further
details regarding its function and governance.

The Chief Compliance Officer reports directly to the
ASX Compliance board on all matters concerned
with compliance and enforcement responsibility,
including listed company compliance with Listing
Rules and participant compliance with Operating
Rules.

All ASX Compliance directors are independ-
ent non-executives. The biographies of the ASX
Compliance board directors are available on ASX’s
website.

Ms Segal will retire as a director of ASX Compliance
on 1 September 2015. Mrs Ridout will become a
director of ASX Compliance from this date.

ASX has implemented robust controls and
procedures in the form of Information Handling
Standards to manage commercially sensitive infor-
mation provided to ASX by other licensed listing
and trading venues.

ASX Annual Report 2015 | Corporate governance

ASX clearing and settlement subsidiaries

Management

ASX has four subsidiary companies that hold clear-
ing and settlement licences required to operate
clearing and settlement facilities, and two inter-
mediate holding companies. The clearing and
settlement boards focus on risk management and
oversight of the clearing and settlement operations
of the clearing and settlement subsidiaries.

The ASX Board relies on these boards to provide
oversight of the management accounts of the clear-
ing and settlement subsidiaries, the management
of clearing and settlement risk, and compliance
with the Financial Stability Standards determined
by the Reserve Bank of Australia.

Role and responsibilities of the CEO
The Board has delegated day-to-day management
of the ASX Group to the Managing Director and
CEO (CEO).

The CEO is responsible for the overall operational
and business management of ASX.

He is also responsible for managing ASX’s reputa-
tion and profit performance in accordance with the
strategy, plans and policies approved by the Board.

Senior Management
The senior executives reporting to the CEO are
listed on page 31 of the remuneration report.

The clearing and settlement boards’ charter sets
out further details regarding their functions and
governance.

Roles and responsibilities are defined in specific
position descriptions.

The biographies of ASX’s senior executives are
available on ASX’s website.

ASX Clear and ASX Settlement are the sole provid-
ers of clearing and settlement arrangements for
Australia’s cash equities markets. The boards of ASX
Clear and ASX Settlement each have three directors
who do not sit on the ASX Limited board. These direc-
tors meet separately, constituted as the board of ASX
Clear and ASX Settlement, to determine matters
which require consideration of commercially sensitive
information if another market operator or listing
venue is obtaining services from, or access to, ASX’s
clearing and settlement facilities. These boards also
oversee Management’s handling of commercially
sensitive information and the provision of services, or
access to, other market operators and listing venues.
ASX Limited directors do not attend or receive copies
of papers or minutes for such meetings. Management
attendance is limited to employees given permission
by the relevant market operator or listing venue.

All of the directors (other than ASX’s CEO) are
independent non-executives. The biographies of
the ASX clearing and settlement board directors
are available on ASX’s website.

Management performance
and remuneration

Risk management

• The Board assesses senior executive perfor-

mance on an annual basis

• This assessment is undertaken with the

assistance of the CEO and the Remuneration
Committee

• Senior executives are assessed against Group

and individual performance targets

• The overall performance of the ASX Group, the
senior executive’s function and the individual
performance of the executive are considered in
assessing performance

• The CEO is not present when the ASX Board

and committees consider his performance and
remuneration

• Further details regarding senior executive

and CEO performance and remuneration are
set out in the remuneration report which
commences on page 26

• A performance evaluation for senior executives

took place in FY15 in accordance with this process

Company secretaries
The Board is responsible for the appointment
of company secretaries. The ASX Group General
Counsel and Company Secretary is accountable
directly to the Board, through the Chairman, on all
matters to do with the proper functioning of the
Board. The names of ASX’s company secretaries
and their skills, experience and qualifications are
contained on page 36.

Trading by ASX Group directors
and employees

ASX’s Group Dealing Policy restricts dealing in
securities by ASX directors and employees. Using
derivatives and hedging arrangements for unvested
ASX securities, or vested ASX securities subject to
holding locks, is prohibited. Derivatives or hedging
arrangements over vested ASX securities by a
director or other senior executive will be publicly
disclosed by ASX. This policy was updated in
accordance with the latest guidance in FY15.

ASX believes effective risk management is key
to achieving and maintaining its operational and
strategic objectives. The Board is responsible
for approving and reviewing the ASX Group risk
management policy and strategy. The active iden-
tification of risks and implementation of mitiga-
tion measures are responsibilities of Management.
Material business risks are described in the
Operating and Financial Review, which also outlines
the Group’s activities, performance during the year,
financial position and main business strategies.
ASX’s management of economic, environmental
and social sustainability risks is discussed in the
environment, social and governance section of this
report on pages 15 to 17.

The Audit and Risk Committee reviews ASX’s
enterprise risk management framework annually
and receives quarterly reports about enterprise
(strategic and operational) risks, technology and
cyber security, internal audit, regulatory assurance
and external audit. It also receives reports from
the clearing and settlement boards, as well as
half-yearly Management certifications.

The clearing and settlement boards review and
provide oversight of risk management processes,
internal controls and compliance systems in respect
of the management of clearing and settlement
risks (including clearing counterparty credit risk,
treasury investment risk and liquidity risk of ASX
Clear and ASX Clear (Futures), and the settle-
ment risks within ASX Settlement), as well as the
ASX Group’s compliance with the RBA’s Financial
Stability Standards. The clearing and settlement
boards provide regular reports to the Audit and
Risk Committee and minutes of their meetings
are provided to the ASX Board (except where they
cover matters relating to commercially sensitive
information).

Management has established an Enterprise Risk
Management Committee to approve risk policies,
monitor framework execution and coordinate
general risk matters consistent with the Board’s
risk appetite, and to oversee ASX’s enterprise risk

ASX Annual Report 2015 | Corporate governance

Diversity

Payments to political parties

ASX’s Diversity Policy Statement describes how
ASX promotes diversity in the workforce. The
diversity objectives adopted by the Board and
performance in FY15 are set out on page 16.

Shareholder engagement

ASX’s shareholder communications policy sets out
ASX’s aim to:

• communicate with shareholders concisely,

accurately and in plain language

• deal with shareholders fairly, transparently

and openly.

All market sensitive disclosure, including any earn-
ings or other guidance, is first made available on the
ASX Market Announcements Platform. ASX does
not selectively brief or provide broker forecasts to
analysts or investors.

ASX actively engages with government and polit-
ical decision-makers to help them understand the
role ASX performs, the investments it is making to
build world-class infrastructure, and the globally
competitive and dynamic market environment in
which it operates.

ASX has a responsibility to its shareholders,
customers and staff to proactively and clearly
communicate its position on matters of public
policy and the opportunities and challenges facing
the business.

During FY15, ASX paid $100,000 in membership
fees to each of the Liberal Party Australian Business
Network and the Federal Labor Business Forum.
ASX’s membership of these business networks
provides an opportunity to engage with a wide
cross-section of policy and business decision-mak-
ers. ASX made no other payments to political
parties during FY15.

ASX uses a number of channels and technologies,
including webcasting and social media, to commu-
nicate widely and promptly. It enables shareholders
to participate in shareholder meetings, and deals
with shareholder enquiries respectfully and quickly.

All payments to political parties are disclosed by
ASX and must be approved by the CEO and the
Group General Counsel in line with the policy and
limits set by the Board.

AGM
ASX’s AGM will be held on Wednesday 30
September 2015 at 10am Australian Eastern
Standard Time, in the ASX Auditorium, lower
ground floor, Exchange Square, 18 Bridge Street,
Sydney. Further details about ASX’s 2015 AGM are
provided on page 72.

management framework. The risk framework
recognises the broad economic and regulatory
context the Group operates within and distin-
guishes between strategic and operational risks.

risk management and internal control, and that
the system is operating effectively for financial
reporting risks.

Internal control systems and procedures are
reviewed by the internal auditor. The General
Manager Internal Audit reports to the Audit and
Risk Committee, ASX Compliance board, clear-
ing and settlement boards, and the CEO for
functional audit purposes, and to the Chief Risk
Officer for administrative purposes. The Audit and
Risk Committee approves the remuneration of
the General Manager Internal Audit. The internal
audit function is independent of external audit,
and has full and free access to the Audit and Risk
Committee, ASX employees and ASX records. The
Audit and Risk Committee determines internal
audit’s scope and budget each year, and monitors
Management’s response to internal audit reviews.
The Internal Audit charter is available online.

Regulatory Assurance also provides an assurance
function. It conducts oversight of the Group by
mapping the compliance framework for key obli-
gations with a focus on market operator and clear-
ing and settlement facility obligations; providing
training to the business so that key Australian
and international obligations are understood and
complied with; undertaking compliance reviews;
and reporting to regulators. The General Manager
Regulatory Assurance has a direct reporting line to
the chairs of the Audit and Risk Committee, ASX
Compliance board, and the clearing and settle-
ment boards for key licence obligations and conflict
handling arrangements, and to the Group General
Counsel.

When considering the Audit and Risk Committee’s
review of half-year and full-year financial state-
ments, the ASX Board receives a statement from
the CEO and the Chief Financial Officer affirming
that ASX’s financial statements give a true and fair
view, in all material respects, of the consolidated
entity’s financial position and comply in all mate-
rial respects with relevant accounting standards.
This statement also confirms that the financial
statements are founded on a sound system of

In a separate statement, the CEO and Chief Risk
Officer also confirm to the Board that ASX’s risk
management and internal control systems are
operating effectively for material business risks,
and that nothing has occurred since period-end
that would materially change the position.

ASX’s policies on oversight and management of
material business risks are summarised online.

Continuous disclosure
ASX’s Listing Rule 3.1 Policy sets out how ASX
complies with its disclosure obligations. This policy
was reviewed and updated in accordance with the
latest guidance in FY15.

Code of Conduct

ASX’s Code of Conduct and Anti-Bribery and
Corruption, and Fraud Control policies promote
ethical and responsible decision-making by
all directors and employees of the ASX Group.
Employees are required to act with high stand-
ards of honesty, integrity, fairness and equity in
all aspects of their employment. There are formal
escalation and grievance procedures. All forms of
facilitation payments are forbidden.

During FY15, ASX implemented a Gift and
Entertainment Policy for employees and direc-
tors. All gifts above $200 (for staff) and $500 (for
directors) must be reported. The Audit and Risk
Committee receives periodic reports.

The Whistleblower Protection Policy supports
employees who report non-compliant or suspi-
cious and unethical conduct by other employees.
This formalises ASX’s commitment to protect the
confidentiality and position of employees wishing
to raise matters that affect the integrity of ASX.

The Audit and Risk Committee receives regular
reporting on these matters.

ASX Annual Report 2015 | Corporate governance

Remuneration
report

This report outlines ASX’s remuneration framework
and the outcomes for the year ended 30 June 2015
(FY15) for the ASX Limited Board, the CEO and the
CEO’s direct reports. It also explains the changes to
ASX’s executive remuneration framework effective
from 1 July 2015 (FY16).

The report has been prepared in accordance
with the requirements of section 300A of the
Corporations Act 2001.

Role of Remuneration Committee

The Remuneration Committee oversees ASX’s
executive remuneration framework and monitors
remuneration outcomes to take account of the
interests of shareholders and ASX’s commitment to
maintaining sound and effective risk management,
and the integrity of its markets.

The Board approves, and reviews on an annual
basis, the remuneration of the CEO on the recom-
mendation of the Remuneration Committee.

market practices regarding remuneration
structures, short-term incentives (STI) and
long-term incentives (LTI)

• 3 Degrees Consulting – $75,500 to support the
review of ASX’s executive remuneration frame-
work, and benchmarking of Group Executive
and CEO remuneration and reporting.

Executive remuneration framework review

At the 2014 AGM the Chairman indicated that there
would be a review of ASX’s executive remunera-
tion framework and the CEO’s remuneration. The
objectives of the review were to:

• improve shareholder alignment

• align incentive arrangements with ASX’s long-

term strategy

• provide incentive arrangements that are

valued by and motivate executives

• establish incentive arrangements that promote

effective risk management and market
integrity

Involvement of subsidiary boards
The Remuneration Committee receives input from
a number of subsidiary boards before making
remuneration determinations for executives with
specific responsibilities:

• provide consistency of treatment across the

executive team

• manage the financial impact on the ASX cost

base and earnings.

• ASX’s clearing and settlement boards provide
input on the performance of executives with
risk management responsibilities that relate to
ASX’s clearing risk and settlement operations

• ASX Compliance board provides input on the
performance of the Chief Compliance Officer.

The FY16 executive remuneration framework was
agreed with these subsidiary boards.

Advisors
The Remuneration Committee operates inde-
pendently of ASX management and directly
engages remuneration advisors. During FY15,
the Remuneration Committee paid the following
amounts to its advisors:

• Ernst & Young – $15,965 to advise on current

The review involved consultation with sharehold-
ers, regulators and benchmarking to understand
context, positioning and market practice.

The Chairman met with a cross-section of share-
holders to canvass their views on market practice
and the proposed changes. There was a range
of views on what constitutes best practice and
specific feedback on the changes the Board was
considering. The Board took the feedback into
account in the design process.

The review is complete and a new executive remu-
neration framework is in place from 1 July 2015.

The executive remuneration framework applies to
the CEO, Group Executives and General Managers.
Together, these executives represent approximately
8% of headcount.

Changes to executive remuneration
framework from 1 July 2015 (FY16)

ASX’s new executive remuneration framework
recognises that the development and implemen-
tation of the strategy for a major exchange group
requires a long-term horizon. The new framework
extends the STI and LTI incentive programs to four
years and makes greater use of equity as a deferral
mechanism.

The LTI plan, in which only the CEO and Deputy
CEO participate, has also been updated to reflect
market trends and feedback from investors.

There are no fixed remuneration increases for the
CEO and Group Executives in FY16, except for the
Deputy CEO who has transitioned to a remuner-
ation structure that mirrors that of the CEO. The
changes to the executive remuneration framework
will have no material impact on Group expenses in
FY16 and over the initial four-year period.

Further details of the changes are set out below.

STI plan
From FY16, the STI deferral mechanism is:

• Group Executives: 40% of STI award paid in

cash, 30% deferred in equity for two years and
30% deferred in equity for four years

• General Managers: 50% of STI award paid in

cash and 50% deferred in equity for two years.

Previously, 50% of the STI award was deferred
in cash for two years. Deferral of STI into equity
strengthens shareholder alignment.

Executives will receive dividends on deferred
equity, as STI has been ‘earned’. Moreover, divi-
dends are an important element of shareholder
returns.

Clawback provisions continue to apply to all
deferred and unvested ‘at risk’ payments, and are
described in more detail on page 31 of this report.

ASX Annual Report 2015 | Remuneration report

Remuneration mix
The STI opportunity for Group Executives has
been increased to recognise the lower upfront
cash component and longer vesting period. For
FY16, there are no changes to Group Executive fixed
remuneration, other than the Deputy CEO. This
means the increased STI award opportunity from
FY16 is ‘at risk’ and deferred for up to four years.

Position

CEO*

Fixed

At risk (STI)

At risk (LTI)

Fixed

Deputy CEO*

At risk (STI)

* FY15 STI arrangements for CEO and Deputy CEO were
expressed as maximum values, not targets.

Other Group
Executives

At risk (LTI)

Fixed

At risk (STI)

At risk (LTI)

FY15
43%

38%

19%

35%

33%

32%

FY16
40%

40%

20%

40%

20%

65-80%

20-35%

60-75%

25-40%

LTI plan
The Board considered extending the LTI plan to all Group Executives and concluded that changes to
the STI deferral mechanism would be more effective in meeting the objectives of the review. The CEO
and Deputy CEO will continue to participate in the LTI plan.

The Board approved a number of changes to the LTI plan following a review of general market trends
and investor feedback. These are summarised in the following table. The result is an LTI plan that is
based on market best practice and strengthens the alignment of management incentives with share-
holder interests.

LTI design element FY15 performance rights
Term
Valuation1
Hurdles

Three years

EPS vesting

TSR vesting

Retesting

Clawback

Fair value
• 70% earnings per share (EPS)
• 30% relative total shareholder return (TSR)
• Vesting range 8.1-10% compound annual

EPS growth

• 5% vests when initial 8.1% hurdle is reached

• Vesting range 51st to 76th percentile
• 50% vests at 51st percentile
• VWAP calculated over six months
• Peer group is ASX 100 (excluding property
trusts and mineral companies) and selected
international exchanges

• No
• If outcome ‘inappropriate benefit’
• If necessary to protect financial soundness
of ASX or where adverse outcomes have
arisen that reduce original assessment of
performance (CEO only)

Board discretion

• Increase/decrease vesting by 20%

FY16 performance rights
Four years

ASX share price (face value)
• 50% EPS
• 50% TSR
• Vesting range 5.1-10% compound annual

EPS growth

• 50% vests when initial 5.1% hurdle is

reached

• Vesting range 51st to 76th percentile
• 25% vests at 51st percentile
• VWAP calculated over three months
• Peer group is ASX 100 excluding property

trusts

• No
• If outcome ‘inappropriate benefit’
• If necessary to protect financial sound-

ness of ASX or where adverse outcomes
have arisen that reduce original assess-
ment of performance (CEO only)
• Increase/decrease vesting by 20%
• Adjust if outcome materially impacted
by changes to dividend policy, capital
structure, gearing or structure

Dividends during
vesting period
1 Valuation in this table refers to the basis on which performance rights are granted. The accounting treatment of

• No

CEO arrangements

Deputy CEO arrangements

Between FY12 and FY15, the Deputy CEO had an
individual employment contract which was put in
place when the Board was managing CEO succes-
sion arrangements. This contained a specific remu-
neration structure that reflected the environment
in which the exchange operated at the time and
the skills of the individual.

From FY16, the Deputy CEO’s remuneration
arrangements are aligned with the CEO with a
40/40/20 remuneration mix as follows:

Fixed

STI

LTI

FY15
$825,000

$825,000
(maximum)
$600,000
cash
$225,000
deferred in
cash for two
years

$750,000
Fair value

FY16
$1,000,000

$1,000,000 (target)
Maximum 150% of
target
40% cash
30% deferred in
equity for two years
30% deferred in
equity for four years

$500,000
ASX share price
(face value)

Total
(at target)

$2,400,000

$2,500,000

The remainder of this report summarises the ASX
remuneration framework and outcomes for the
year ending 30 June 2015 (FY15).

The CEO has not received any changes to remuner-
ation since he started with ASX in October 2011.

From FY16, the CEO’s STI arrangements are aligned
with Group Executives. This was announced to the
market in June 2015.

The FY16 increase to the CEO’s target remuneration
is approximately 9%. This increase is split evenly
between STI and LTI, which are both ‘at risk’ and
deferred. Under the new arrangements, 60% of
the CEO’s overall remuneration is ‘at risk’. Over
70% of this ‘at risk’ remuneration will be deferred
into either equity (STI) or performance rights (LTI).

The CEO’s remuneration mix is 40% fixed, 40% STI
and 20% LTI. His FY16 remuneration is:

Fixed

STI

LTI

FY12 to FY15
$1,750,000

$1,500,000
(maximum)
50% cash
50% deferred
in cash for
two years

$750,000
Fair value

FY16
$1,750,000

$1,750,000 (target)
Maximum 150% of
target
40% cash
30% deferred in
equity for two years
30% deferred in
equity for four
years

$875,000
ASX share price
(face value)

Total
(at target)

$4,000,000

$4,375,000

The change to the STI plan deferral means that for
FY16 the CEO’s cash remuneration will be margin-
ally lower than it was in FY15 (assuming targets
are met).

Using the ASX share price to determine the number
of LTI performance rights that will be granted to
the CEO effectively reduces the value of the LTI
award. The CEO’s LTI has been increased to reflect
the new basis on which it is determined.

performance rights is set out on page 30.

ASX Annual Report 2015 | Remuneration report

FY15 performance outcomes

ASX Group remuneration

The outcomes from the annual FY15 performance
review process were as follows:

Fixed remuneration outcomes

• Fixed remuneration for existing Group Executives
was frozen to recognise the changes to the execu-
tive remuneration framework that apply from 1 July
2015 (FY16)

• Deputy CEO remuneration mix has been adjusted to
be consistent with the mix that applies to the CEO

STI outcomes reflect company performance

• The Board determined that the Group met its

objectives for FY15

• Individual STI outcomes were, on average, on target
• The CEO was awarded STI of $1.5 million, with 50%

deferred for two years

EPS portion of FY13 LTI was not met

• The 70% earnings per shares (EPS) portion of the

FY13 LTI award was not met

• The 30% total shareholder return (TSR) portion
of the FY13 LTI award will be determined at the
October 2015 vesting date

Remuneration philosophy

The ASX reward framework is designed to reward
employees for behaviours and results that contrib-
ute towards the delivery of the ASX strategy. The
framework is based on the following key principles:

• link rewards to the achievement of the strategy

and the creation of shareholder value

• apply rigorous performance measures to ‘at

risk’ remuneration

• assess and reward performance on both finan-

cial and non-financial measures

• provide competitive remuneration that is

designed to attract, motivate and retain talent

• promote soundness and effectiveness of risk

management and market integrity.

The remuneration arrangements for all staff are
made up of a fixed remuneration component and
a variable component. The variable component
is ‘at risk’ subject to performance, and delivered
through the STI plan.

The relative weighting of fixed and variable compo-
nents (remuneration mix) will vary with role level,
complexity and market practice. The remunera-
tion mix is expressed as a percentage of the total
reward which equates to 100%.

Fixed remuneration
Fixed remuneration comprises cash salary, super-
annuation and other salary sacrificed benefits.

Fixed remuneration is reviewed on an annual basis.
Increases are not automatic, are subject to a mini-
mum level of individual performance and at the
discretion of the Board.

All roles within ASX are benchmarked against
comparable market data. The ASX market position-
ing for fixed remuneration is the median to upper
quartile, depending on individual performance.

Variable remuneration
The STI plan provides variable remuneration to
drive the achievement of the ASX strategy and
performance objectives over a 12-month period.

All employees set individual goals and targets
across five scorecard areas: customers and growth,
people and culture, operational excellence, regu-
latory focus, and financial results. Individual goals
and targets support ASX’s strategic goals.

The STI provides potential rewards that are differ-
entiated. STI awards are based on the performance
of the ASX Group against the objectives set by
the Board, and individual performance against
the goals and targets in the individual scorecards.

All employees are eligible to participate in the STI
plan. Awards vary from year to year at the discre-
tion of the CEO and the Board.

ASX Annual Report 2015 | Remuneration report

Executive remuneration
framework and structure

The changes to the STI plan deferral from FY16 are
described on page 26. The other elements of the
STI plan are unchanged from past years.

An executive’s STI is calculated by taking three
factors into account and applying the formula as
illustrated in the diagram below:

Individual performance
Each executive has an individual scorecard with
goals that support the ASX strategy.

The individual performance of each executive
is assessed using a five point scale. For excep-
tional performance, 150% of the target STI can be
awarded (except for the CEO and Deputy CEO until
FY16). The minimum award is nil.

Target STI in
$

Group
incentive
pool %

Individual
performance
rating %

STI award in
$
50% deferral

Target reward model

On target STI as
% of total reward

Determines the
available pool

Differentiated based
on 1-5 rating scale

Behaviours as ‘gate’

Recommendation

Incentives are at
Board discretion

Financial and
non-ﬁnancial
performance

Target STI
The relative weighting of fixed and variable compo-
nents will vary with role level, complexity and typi-
cal market practice. In FY15, the level of STI in the
remuneration mix varied from 20% to 35% of total
remuneration, with the higher end of the range
applying to more senior executives.

The sum of the individual target STI amounts deter-
mines the target Group pool for executives.

Group incentive pool
The Board makes an assessment of the Group’s
performance based on financial objectives (50%)
and progress against non-financial and strategic
objectives (50%). Based on that assessment, the
Board approves a Group incentive pool percent-
age that is applied to the target Group pool. For
example, if the target STI pool for executives is
$8.0 million and the Board determines that the
Group’s performance was below target and awards
80% of the pool, the Group STI pool available for
distribution to executives would be $6.4 million.

Individual goals linked
to ASX strategy

50% deferred for
two years in cash

A minimum level of performance against the ASX
leadership behaviours must be achieved to be
eligible for an STI award.

The performance of General Managers is assessed
by the responsible Group Executive and reviewed
by the CEO. The CEO assesses the performance
of Group Executives in consultation with the
Remuneration Committee and the Board.

The Chairman,
in consultation with the
Remuneration Committee and the Board, assesses
the performance of the CEO against objectives set
at the start of the performance period.

STI deferral and vesting
A percentage of the STI awards for executives is
automatically deferred. In FY15, the deferral of the
STI award was 50% for two years in cash.

Payment of the deferred award is subject to contin-
ued satisfactory performance during the deferral
period, and will be forfeited in the case of resigna-
tion by the executive, or termination for misconduct
or poor performance.

Board
assessment

Linking FY15 Group
performance to FY15 STI outcomes

Financial objectives – 50%

Revenue growth

Performance
Revenues increased 6.4%

Net profit after tax (NPAT)

Underlying NPAT up 5.2%. Statutory NPAT up 3.8%

Earnings per share (EPS)

Underlying EPS up 5.0% on previous year

Dividends per share (DPS)

Full-year dividend per share 187.4 cents, up 5.2%. Payout ratio 90%.

Non-financial objectives – 50%

Customers and growth
Build strong partnerships with clients
and a customer-focused culture

Performance
Good progress was made to strengthen engagement and deliver tangible benefits
• Launched further trade execution innovations within Centre Point product suite
• Saw growth in new OTC clearing services with $806 billion cleared
• Reduced fees for electricity futures and interest rate futures
• Established client forums for all main asset classes and ASX services
• Opened new 24-hour Customer Support Centre
• Acquired 49% of Yieldbroker. Remaining interest owned by leading domestic and international banks
Undertook customer survey, which highlights target areas for improvement

Technical and operational performance
Deliver world-class trading and post-
trade infrastructure to Australia’s
financial markets

Solid operational performance and reliability
• Critical systems availability was above the 99.8% and 99.95% ASX benchmarks
• Third party clearing and settlement services met all agreed service levels
• Some technical issues with individual customer connectivity
ASX committed to a significant investment program over next four years, which will see it replace and
upgrade all main trading and post-trade platforms

Regulatory compliance and Risk
Management
Maintain ASX’s position as one of the
highest quality and best regulated
exchange groups

ASX substantially completed a three-year effort to meet the highest standards
• Positive regulatory reviews with no major issues raised
• AA- (long-term) credit rating from Standard & Poor’s
• Sound progress in meeting the strengthened Financial Stability Standards
• European recognition for clearing entities and relief from US regulations
In the fourth quarter, broker BBY Pty Ltd went into voluntary administration. ASX performed its role
in minimising systemic risk to the wider market. In addition, ASX supported the orderly transfer of a
considerable number of customer accounts before and immediately after insolvency was declared

At target

Board
assessment

At target

People and culture
Build a strong performance culture with
a highly engaged team

Progress was positive, particularly in the area of staff engagement
• Staff survey showed significant improvement, with alignment reaching top quartile performance and

engagement close to top quartile

• Diversity: FY16 diversity target of 33% at Board level was met. Some progress against FY16 target of

40% at all senior management levels, although this stretch target remains at risk

Exceeds FY15
target

• Workplace health and safety: lost-time injury frequency rate 0.93

Stakeholder engagement
Be recognised as a positive contributor
to Australia’s economic future

• Continued engagement with end-investors and superannuation sector
• Provided input into the domestic and international regulatory processes
• Contributed to Government reviews, including the Financial System Inquiry

At target

The adjacent table provides an overview of the
Board’s assessment of ASX’s FY15 performance.

In assessing financial performance, the Board takes
into consideration the market conditions in the ASX
businesses that are directly exposed to market
activity levels. This means that incentives may
be awarded even when market conditions lead
to a fall in revenues or earnings, provided other
objectives are met.

The Board determined that the Group met its
performance objectives for FY15. STI awards to
executives ranged from 50% to 125% of target STI
and were, on average, at target.

Long-term incentive overview

The key terms and performance hurdles of the FY15
LTI plan and the changes that will be implemented
from FY16 are described on page 27 of this report.
The other elements of the LTI plan are unchanged
from past years.

The purpose of the LTI plan is to recognise perfor-
mance and behaviours that deliver substantial
long-term shareholder value. The LTI is a grant
of performance rights over ASX ordinary shares,
which will vest if ASX achieves performance hurdles
that have been determined by the Board.

Only the CEO and Deputy CEO participate in ASX’s
LTI plan.

ASX will submit the CEO’s FY16 LTI grant for share-
holder approval at the 2015 AGM. If the grant is not
approved, subject to meeting relevant performance
hurdles, at the time the grant would have vested
four years later (October 2019), the CEO will receive
a cash payment equivalent in value to the LTI he
would have received had shareholder approval
been obtained.

ASX Annual Report 2015 | Remuneration report

EPS LTI component

EPS is calculated by dividing the underlying profit
after tax attributable to members of ASX for the
relevant reporting period (profit after tax adjusted
for the after-tax effect of any significant items) by
the weighted average number of ordinary shares of
ASX. Significant items are revenues and expenses
associated with specific events considered appro-
priate by the directors to be excluded in order to
arrive at underlying earnings. Exclusion of any such
items would be clearly identified and explained if
such action changed any vesting outcome.

EPS performance is measured over a three-year
period (for grants up to FY15; four-year period from
FY16 onwards) using the most recent financial year
end prior to the granting of the award as the base
year, and the final financial year in the performance
period as the end year.

TSR LTI component

TSR is calculated as the movement in share price
and dividends received assuming re-investment of
dividends. For grants up to FY15, TSR was meas-
ured against a peer group determined by the Board
at the time of the offer based on:

From FY16 the peer group will be the ASX 100,
excluding property trusts.

The composition of the peer group may change
as a result of specific events such as mergers and
acquisitions, delisting and financial failure. There
are guidelines for adjusting the peer group follow-
ing such events.

Past LTI grants

Shares relating to grants of performance rights that
have vested are allocated from a surplus pool of
unvested LTI offers within a special purpose trust
and released as shares to the employee. Shares
allocated under the LTI plans rank equally with
other shares on issue at the time those shares
are allocated.

From FY16, the percentage of performance rights
received when vesting commences will be:

The table below provides a summary of the details
of the LTI grants in operation during FY15:

• 50% for performance rights with an EPS hurdle

• 25% for performance rights with a TSR hurdle.

Grant year

Grant date

Participation

Performance
measure

EPS vesting
commences at

FY15
23
September
2014

FY14
25
September
2013

FY13
5
October
2012

70% EPS
30% TSR

8.1%
compound
growth

TSR vesting
commences at

51st
percentile

Rights per
executive

27,432

30,108

35,680

Vesting period

3 years

Accounting treatment of LTI

The change from FY16 to use the ASX share price
to determine the number of performance rights
that will be awarded to the CEO will not change the
accounting treatment of the performance rights.

The fair value of performance rights for the TSR
awards is calculated at grant date by an independ-
ent valuer using a Black-Scholes option valuation
model and Monte Carlo simulation. Details of the
awards, including inputs to the valuation model,
are summarised in the following table:

Grant year
Share price at grant
date

FY15

FY14

FY13

$36.45

$34.70

$29.86

Volatility (pa)

14%

20%

Discount rate (risk
free rate) (pa)

2.87%

2.81%

2.45%

Dividend yield (pa)

5.0%

5.1%

5.8%

Fair value of perfor-
mance rights (EPS
awards)

Fair value of perfor-
mance rights (TSR
awards)

Weighted average
AASB 2 share-based
payment fair value

$31.37

$29.78

$25.09

$17.94

$13.57

$11.53

$27.34

$24.91

$21.02

Company performance

ASX’s financial performance over the five-year
period ending FY15 is shown in the graphs below.

• the ASX 100, excluding property trusts and

Vesting date

mineral companies

24
September
2017

26
September
2016

8
October
2015

• Hong Kong Exchanges and Clearing Limited,
Singapore Exchange Limited and Deutsche
Borse.

Dividends paid

Retesting

Net proﬁt after tax ($million)

Earnings per share (EPS) (cents)

Dividends (cents per share)

ASX share price ($ at end of ﬁnancial year)

3
2
5
3

6
6
5
3

2
9
3
3

2
6
4
3

2
8
4
3

2
3
8
3

8
7
9
3

2
3
0
4

4
8
9
1

8
0
0
2

6
0
9
1

6
4
9
1

5
5
9
1

5
8
9
1

7
5
0
2

4
8
0
2

93.0

85.1

82.3

89.9

95.1

39.90

33.07

35.64

29.98

29.36

90.2

92.8

87.9

88.2

92.3

FY11

FY12

FY13

FY14

FY15

FY11

FY12

FY13

FY14

FY15

Statutory proﬁt

Underlying proﬁt

Reported EPS

Underlying EPS

FY11

Interim

FY12

Final

FY13

FY14

FY15

FY11

FY12

FY13

FY14

FY15

ASX Annual Report 2015 | Remuneration report

Executive service agreements

Each Group Executive has an ongoing service
contract. The key terms are set out below:

The contracts do not provide for any termination
payments, other than payment in lieu of notice
and any statutory entitlements.

Name
E Funke Kupper Managing Director and CEO

Position held

R Aziz

Chief Financial Officer

A J Bardwell

Chief Risk Officer

Group General Counsel and
Company Secretary, Group
Executive Corporate Affairs

Deputy CEO

Group Executive Operations

Chief Compliance Officer

A J Harkness

P D Hiom

T J Hogben

K A Lewis
A J Mostyn1
T Thurman

Contract
effective date
6 October 2011

19 July 2010

10 September
2007

1 July 2015

1 April 2010

19 July 2010

Minimum notice periods (months)

Executive
6

ASX
12

Poor
performance
3

32
12
6
32
3

Group Executive Human Resources

10 October 2006

Chief Information Officer

17 December 2014

1 A J Mostyn resigned 30 June 2015.
2 The notice period for termination for poor performance requires an initial written notice of one month.

Treatment of STI and LTI on departure

Group Executives

CEO

Termination by reason of

Current STI

Deferred STI

Current STI

Deferred STI

ASX provides notice

Notice by the executive

CEO discretion

Vesting

Board discretion Board discretion

CEO discretion

No payment

Board discretion

No payment

Poor performance/summary dismissal CEO discretion

No payment

Cause

Illness

Death

CEO discretion

No payment

CEO discretion CEO discretion Board discretion Board discretion

Performance rights (LTI) will lapse immediately
when a participant ceases employment unless
the Board determines in its discretion that the
participant ceased employment for a qualifying
reason. This includes pursuit of other company-ap-
proved initiatives, death, serious illness, accident
or redundancy. In this instance, the Board may
determine in its discretion the proportion of shares
to be provided.

Shares or interests subject to restrictions under
the LTI plan will be forfeited if, during the restric-
tion period, the participant ceases to be employed
other than for a qualifying reason and the Board
directs that such shares are to be forfeited; or the
participant has in the opinion of the Board been
dismissed with cause or committed an act of fraud,
dishonesty or gross misconduct.

These terms also apply if the CEO’s LTI grant is not
approved at the AGM, and the value of the incentive
is provided to the CEO in cash.

Clawback Policy and Board discretion

The Clawback Policy permits the Board to clawback
some or all of an executive’s proposed perfor-
mance-based remuneration if the Board considers
that such remuneration would be an ‘inappropriate
benefit’. This includes any STI or LTI award and
other performance-based component of remuner-
ation that has not yet been paid or vested with-
out restrictions to an executive. The Board has
absolute discretion to determine what constitutes
an ‘inappropriate benefit’ and how to apply the
clawback, subject to compliance with the law and
the conditions set out in the policy. This discretion
can be applied at any time.

The Board may also clawback some of the CEO’s
deferred STI or LTI where the Board determines
that such action is necessary to protect the financial
soundness of ASX, or where adverse outcomes
have arisen during the deferral period that reduce
the original assessment of the performance gener-
ating the deferred allocation.

The Board may adjust LTI outcomes by 20%, and
(from FY16) more generally if outcomes have been
materially impacted by changes to dividend policy,
capital structure, gearing or structure. This discre-
tion has not been applied in the current year or
prior years. The Board will exercise such discretion
in a manner that is consistent with supporting
sound and effective risk management, protect-
ing ASX’s long-term stability, and aligned with
creation of long-term shareholder value. If this
discretion was applied in any year, it would be
clearly disclosed and explained.

Non-executive director remuneration

The Remuneration Committee reviews and recom-
mends to the Board the remuneration for non-ex-
ecutive directors.

Fees are broadly aligned to the top quartile of the
marketplace so that:

• ASX non-executive directors are remuner-

ated fairly for their services, recognising the

workload, and level of skill and experience
required for the role

• ASX can attract and retain talented non-execu-

tive directors

• fees are in line with market practice.

Remuneration structure
Non-executive director remuneration includes:

• Board fee

• committee (including subsidiary board) fees

• superannuation.

Board, committee and subsidiary board fees have
regard to the responsibilities of each position. Fees
are determined by the Board within the aggregate
amount approved by shareholders. Non-executive
directors have no entitlement to any perfor-
mance-based remuneration or participation in any
share-based incentive schemes. ASX does not have
a non-executive director retirement scheme.

Director fees
The current maximum aggregate amount which
may be paid to all non-executive directors of ASX in
their capacity as members of the ASX Board and its
committees and as directors of subsidiary boards,
is $2.8 million per annum. This was approved by
shareholders at the 2012 AGM. The amount paid
in FY15 was $2,232,624.

The Board reviews its fees regularly in line with
ASX’s objectives for non-executive remuneration.
The Board determined there would be no increase
to fees payable to ASX Limited non-executive direc-
tors for FY16.

Director shareholding policy
During FY15, the Board introduced a sharehold-
ing policy for non-executive directors. The policy
requires non-executive directors to hold at least
5,000 shares and the Chairman to hold at least
12,000 shares by the end of FY17 (for directors
in office at the time the policy was introduced) or
within three years of appointment. Directors have
either met or are on track to achieve the guideline.
Director shareholdings as at 30 June 2015 are set
out on page 35 of this report.

ASX Annual Report 2015 | Remuneration report

Statutory remuneration of CEO
and Group Executives

$
E Funke Kupper
Managing Director and CEO

R Aziz
Chief Financial Officer

A J Bardwell
Chief Risk Officer

A J Harkness
Group General Counsel and Company Secretary,
Group Executive Corporate Affairs

P D Hiom
Deputy CEO

T J Hogben
Group Executive Operations

K A Lewis
Chief Compliance Officer

A J Mostyn
Group Executive Human Resources

T Thurman
Chief Information Officer

Total

Short-term

Post-employment

Long-term

Non-
monetary

Superannuation
benefits

Year

2015
2014

Salary

1,731,217
1,732,225

431,217
407,225

606,217
607,225

681,217
569,211

787,702
761,501

456,217
432,225

681,217
665,175

356,217
332,225

532,166
460,345

STI

750,000
750,000

110,000
100,000

77,500
70,000

170,000
150,000

600,000
560,000

117,500
117,500

135,000
150,000

62,500
62,500

170,000
157,500

6,263,387
5,967,357

2,192,500
2,117,500

-
-

18,515
20,724

-
-

-
7,050

-
-

49,293
71,880

67,808
99,654

LTI and
deferred STI
712,500
587,500

100,000
92,500

60,000
50,000

145,000
115,000

175,000
175,000

108,750
100,000

145,000
130,000

57,500
51,250

146,250
67,500

Other1
-
-

7,068
6,668

-
-

11,355
9,488

13,066
12,575

7,605
7,205

-
-

5,834
5,418

-
-

Share-based
payments2
260,979
262,834

-
-

260,979
262,834

-
-

Total

3,473,479
3,350,334

667,068
624,168

762,500
745,000

1,026,355
861,474

1,874,045
1,810,409

708,855
674,705

980,000
970,000

500,834
469,168

916,492
775,000

18,783
17,775

169,047
159,975

1,650,000
1,368,750

44,928
41,354

521,958
525,668

10,909,628
10,280,258

Performance-
related3
49.6%
47.8%

31.5%
30.8%

18.0%
16.1%

30.7%
30.8%

55.3%
55.1%

31.9%
32.2%

28.6%
28.9%

24.0%
24.2%

34.5%
29.0%

40.0%
39.0%

1 ‘Long-term other’ includes accrued long service leave entitlements.
2 Reflects annual share-based payments expense and is calculated using the fair value of performance rights at grant date, less any write-back for performance rights lapsed as a result of non-market hurdles not attained.
3 Reflects the percentage of total remuneration that is performance-related.

ASX Annual Report 2015 | Remuneration report

Remuneration received or available in the
financial year

The remuneration table on this page has been
provided as additional non-statutory information
to assist in understanding the total value of remu-
neration received by Key Management Personnel
(KMP) in the current and prior financial years. The
remuneration table on the previous page has been

prepared in accordance with accounting stand-
ards as required by the Corporations Act 2001.
The accounting standards only require the disclo-
sure of the expense or cost to the company in the
financial years presented, which may result in only
a portion of cash remuneration being disclosed

where payments are deferred to future financial
years. In addition, the accounting standards require
share-based payments expense to be calculated
using the grant date fair value of the shares rather
than current market prices.

STI awarded and paid
in FY152

Total payments
applicable to FY15

Deferred STI
award3

Deferred share-based
awards4

Total remuneration
received in FY155

Previous year awards
that vested in FY15

$
E Funke Kupper
Managing Director and CEO

R Aziz
Chief Financial Officer

A J Bardwell
Chief Risk Officer

A J Harkness
Group General Counsel and Company Secretary,
Group Executive Corporate Affairs

P D Hiom
Deputy CEO

T J Hogben
Group Executive Operations

K A Lewis
Chief Compliance Officer

A J Mostyn
Group Executive Human Resources

Total fixed
remuneration
for FY151

1,750,000
1,750,000

450,000
425,000

625,000
625,000

700,000
586,986

825,000
800,000

475,000
450,000

700,000
690,000

375,000
350,000

Year

2015
2014

750,000
750,000

110,000
100,000

77,500
70,000

170,000
150,000

600,000
560,000

117,500
117,500

135,000
150,000

62,500
62,500

c=a+b

2,500,000
2,500,000

560,000
525,000

702,500
695,000

870,000
736,986

1,425,000
1,360,000

592,500
567,500

835,000
840,000

437,500
412,500

T Thurman
2015
2014
Chief Information Officer
1 Fixed remuneration comprises salary, non-monetary benefits, other short-term remuneration and superannuation. Non-monetary benefits are available as salary sacrifice.
2 The portion of STI awarded in FY15 but deferred for two years is shown in the CEO and Group Executive STI allocations for FY15 table on page 34.
3 This relates to the payment of the cash-based STI awarded in July 2013 (2014: July 2012) and deferred for two years.
4 No deferred share-based awards vested in FY15.
5 The STI and deferred award payments shown as being received in the financial year were made shortly after the conclusion of the financial year.

600,000
550,000

770,000
707,500

170,000
157,500

675,000
500,000

100,000
85,000

50,000
50,000

140,000
90,000

175,000
175,000

100,000
100,000

140,000
120,000

52,500
50,000

135,000
-

-
-

f=c+d+e

3,175,000
3,000,000

660,000
610,000

752,500
745,000

1,010,000
826,986

1,600,000
1,535,000

692,500
667,500

975,000
960,000

490,000
462,500

905,000
707,500

ASX Annual Report 2015 | Remuneration report

CEO and Group Executive STI allocations for FY15

Value of CEO and Group Executive LTI allocations for FY15

Total STI awarded2

STI portion
deferred3

The following table shows the minimum and maximum values of performance rights that may be
received by the CEO and Group Executives as remuneration in future financial years:

E Funke Kupper

R Aziz

A J Bardwell

A J Harkness

P D Hiom

T J Hogben

K A Lewis

A J Mostyn

STI target1
1,500,000

$
1,500,000

222,000

156,250

300,000

825,000

234,000

300,000

125,000

220,000

155,000

340,000

825,000

235,000

270,000

125,000

%
100%

99%

113%

100%

101%

90%

100%

$
750,000

110,000

77,500

170,000

225,000

117,500

135,000

62,500

T Thurman
170,000
324,000
1 STI values for the CEO and the Deputy CEO are maximum values not targets (refer to separate contractual arrange-

340,000

105%

ments). Targets for other KMPs are for on-target performance.
2 Total STI award including cash payment and deferred component.
3 This represents the value of the STI award that is deferred until 1 July 2017. The deferred STI awards are subject to

continued satisfactory performance during the deferral period.

Grant date:
Vesting date:

5 October 2012
8 October 2015

25 September 2013
26 September 2016

23 September 2014
24 September 2017

E Funke Kupper

P D Hiom

Min $1

Max $2

749,994

Min $1

Max $2

749,990

Min $1

Max $2, 3

749,991

1 Since the performance rights are issued at zero exercise price, their minimum total value is nil, on the basis that they

will not vest if the applicable performance/vesting conditions are not met.

2 The above amounts represent the maximum fair value for future years of the performance rights yet to vest, as at
their grant date. The maximum total value is the number of rights issued multiplied by the weighted average fair
value.

3 The fair value per share of the FY15 grant is $27.34 for the CEO and Deputy CEO.

No other KMP had performance-related rights over issued ordinary shares in ASX directly, indirectly
or beneficially.

CEO and Group Executive LTI allocations for FY15

CEO and Group Executive holdings of ordinary shares

The following table shows the movement during the financial year in the number of performance-re-
lated rights over issued ordinary shares in ASX held directly, indirectly or beneficially, by the CEO and
other KMP, including their personally related parties:

E Funke Kupper

P D Hiom

Held at
1 July 2014
92,698

92,698

Granted
as compensa-
tion during the
year
27,432

Vested
and exercised
during the year
-

Lapsed
during the year
26,910

Held at
30 June 2015
93,220

27,432

26,910

93,220

No other KMP had performance-related rights over issued ordinary shares in ASX directly, indirectly
or beneficially.

E Funke Kupper

R Aziz

A J Bardwell

A J Harkness

P D Hiom

T J Hogben

K A Lewis

A J Mostyn

T Thurman

Held at
1 July 2014
11,053

28,545

4,906

4,577

30,295

3,331

32,288

Received on vest-
ing of rights over
deferred shares
-

Other changes
-

Held at
30 June 2015
11,053

(3,331)

28,545

4,906

4,577

30,295

32,288

ASX Annual Report 2015 | Remuneration report

Non-executive director fees for FY15

Equity holdings of non-executive directors

Details of the remuneration of the non-executive directors of ASX are set out in the following table.
Remuneration includes all fees received as directors of ASX as well as subsidiary boards and commit-
tees. Refer to pages 23 and 24 of the corporate governance section for details of directorships and
memberships of subsidiary boards and committees.

No performance rights have been granted to ASX non-executive directors.

The table below summarises the movements in holdings of ordinary shares in ASX held directly, indirectly
or beneficially, by each ASX non-executive director and their personally related entities.

R Holliday-Smith

Y A Allen
(appointed 9 February 2015)

K R Henry

P R Marriott

H M Ridout

D Roche
(appointed 1 August 2014)

J S Segal

D J Stevens

P H Warne

Total

Year

2015
2014

2015

2015
2014

2015

2015
2014

Short-term
salary and fees

Post-employment
superannuation

475,000
475,000

37,500

205,000
186,780

300,000
287,500

165,000
162,500

112,500

265,000
262,500

235,000
99,358

295,000
265,000

18,783
17,775

3,563

18,783
16,683

18,783
17,775

15,675
15,031

10,688

18,783
17,775

18,783
8,584

18,783
17,775

Total

493,783
492,775

41,063

223,783
203,463

318,783
305,275

180,675
177,531

123,188

283,783
280,275

253,783
107,942

313,783
282,775

2,090,000
1,738,638

142,624
111,398

2,232,624
1,850,036

R Holliday-Smith

Y A Allen
(appointed 9 February 2015)

K R Henry

P R Marriott

H M Ridout

D Roche
(appointed 1 August 2014)

J S Segal

D J Stevens

P H Warne

Held at
1 July 2014
4,228

Other
changes
3,772

Held at
30 June 2015
8,000

Holding at
20 August 2015
8,000

N/A

3,316

N/A

2,211

6,000

1,860

2,000

5,000

10,000

2,000

11,500

1,860

5,316

5,000

10,000

4,211

11,500

6,000

1,860

5,316

5,000

10,000

4,211

11,500

6,000

Further details of the Board director shareholding policy for non-executive directors introduced during
FY15 is set out on page 31 of this report.

ASX Annual Report 2015 | Remuneration report

Directors’
report

The directors present their report, together with
the financial statements of ASX Limited (ASX or the
Company) and its subsidiaries (together referred
to as the Group), for the year ended 30 June 2015
(FY15) and the auditor’s report thereon . The finan-
cial statements have been reviewed and approved
by the directors on the recommendation of the ASX
Audit and Risk Committee.

The consolidated net profit after tax for the year
attributable to the members of ASX was $397.8
million (2014: $383 .2 million).

Directors

The directors of ASX in office during the financial
year and at the date of this report (unless otherwise
stated) were as follows:

• Mr Rick Holliday-Smith (Chairman)

• Mr Elmer Funke Kupper (Managing Director

and CEO)

• Ms Yasmin A Allen (appointed 9 February 2015)

• Dr Ken R Henry AC

• Mr Peter R Marriott

• Mrs Heather M Ridout AO

• Mr Damian Roche (appointed 1 August 2014)

• Ms Jillian S Segal AM

• Mr Dominic J Stevens

• Mr Peter H Warne

Directors’ meetings and their attendance at those
meetings for FY15 (including meetings of commit-
tees of directors) are disclosed on page 22 of the
Annual Report. The qualifications and experience
of directors, including current and recent director-
ships, are detailed on pages 19 to 21 of the Annual
Report.

ASX Annual Report 2015 | Directors’ report

Company secretaries

Review of operations

Amanda J Harkness
Group General Counsel and Company Secretary,
Group Executive Corporate Affairs
BEc LLB (Hons)(ANU), MA (Macquarie), FGIA,
FAIM, FAICD
Ms Harkness is Group General Counsel and
Company Secretary. As Company Secretary, she is
responsible for company secretarial and corporate
governance support across the Group. Ms Harkness
has held senior adviser roles as a partner in the
Australian law firm Herbert Smith Freehills and at
the consulting firm McKinsey & Co. Ms Harkness has
held executive management roles in Telstra and a
start-up joint venture funded by British Telecom.
She has worked in businesses in Australia, New
Zealand, Malaysia, Korea, Hong Kong and Japan.
Since 2009, she has been a non-executive direc-
tor of Vodafone Hutchison Australia Pty Limited.
Previously she has served on a range of Federal
Government advisory boards focused on innovation
and technology development.

The following people are also Company Secretaries:
Marcin Firek, BEc LLB (Macquarie), FGIA, General
Manager Company Secretariat; and Daniel Csillag,
BA LLB (UNSW), Senior Legal Counsel and Company
Secretary. They both have experience in company
secretariat roles arising from time at ASX, large
listed companies and other relevant entities.

Report on the business

Information on the operations and financial posi-
tion of the Group and its business strategies and
prospects is set out in the Operating and Financial
Review on pages 4 to 11 of this Annual Report.

Dividends

The following table includes information relating to
dividends in respect of the current and prior finan-
cial years, including dividends paid or determined
by the Company since the end of the financial year.

Cents per
share

Total
amount
$m

Type

Date of payment

In respect of the current financial year
Interim

178.7

92.3

18 March 2015

Final

Total

95.1

187.4

184.1

362.8

23 September 2015

In respect of the prior financial year
88.2
Interim

170.8

26 March 2014

Final

Total

89.9

178.1

174.0

344.8

24 September 2014

The final dividend was determined on 20 August
2015.

Significant changes in the state of affairs
There were no significant changes in the state of
affairs during the year.

Principal activities
During the year the principal activities of the Group
consisted of the provision of:

Events subsequent to balance date
No matter or circumstance has arisen since 30
June 2015 that has significantly affected, or may
significantly affect, the:

• securities exchange and ancillary services

a. Group’s operations in future financial years

• derivative exchange and ancillary services

b. results of those operations in future financial

• central counterparty clearing services

• registry, depository, settlement and delivery-
versus-payment clearing of financial products.

years, or

c. Group’s state of affairs in future financial

years.

Likely developments
For further information about likely developments
in the operations of the Group, refer to the business
strategies and prospects for future financial years
section in the Operating and Financial Review on
pages 4 to 11 of this Annual Report. The expected
results from those operations in future financial
years have not been included because they depend
on factors, such as general economic conditions,
risks outlined, and the success of these strategies,
some of which are outside the control of the Group.

Environmental regulation
The operations of the Group are not subject to any
particular or significant environmental regulations
under a Commonwealth, State or Territory law.

Indemnification and insurance of officers
The Group has paid insurance premiums in respect
of directors’ and officers’ liability for current and
former directors and officers of the Company, its
subsidiaries and related entities.

The insurance policies prohibit disclosure of the
nature of the liabilities insured against and the
amount of the premiums.

The constitution of ASX provides that every person
who is or has been a director, secretary or executive
officer of the Company, and each other officer or
former officer of the Company or of its related
bodies corporate as the directors in each case
determine, is indemnified by the Company to the
maximum extent permitted by law . The indemnity
covers losses or liabilities incurred by the person
as a director or officer, including but not limited to
liability for negligence and for legal costs on a full
indemnity basis.

Share information
Performance rights to ordinary shares
At the date of this report, ASX had 186,440 perfor-
mance rights outstanding . For further details on
the performance rights including performance
hurdles for vesting, refer to the remuneration
report on pages 26 to 35 of this Annual Report.

Exercise of performance
rights to ordinary shares
No performance rights vested during the financial
year.

Proceedings on behalf of the Group
Under section 237 of the Corporations Act 2001, no
application has been made in respect of the Group
and no proceedings have been brought or inter-
vened in on behalf of the Group under that section.

Remuneration report – audited
Information on ASX’s remuneration framework and
the outcomes for FY15 for the ASX Limited Board,
the CEO and the CEO’s direct reports, and changes
for FY16, is included in the remuneration report on
pages 26 to 35 of this Annual Report.

Statutory audit services:
Audit and review of the financial
reports and other audit work
under Corporations Act 2001

Audit of information
technology platforms

Other audit services:
Audit of technology applications

Consolidated

2015
$

2014
$

595,560 566,400

159,700 155,000

61,811

Risk model validation

182,800

Code of Practice compliance

41,000

51,000

Non-audit services:
Tax compliance services

Other non-audit services

58,395

72,032

50,000

Total auditor’s remuneration

1,037,455 956,243

Corporate governance
Group corporate governance matters are discussed
on pages from 18 to 25 of this Annual Report and
are also available on the Group’s website.

In the prior financial year, PwC provided other
non-audit services for the review of the derivatives
pricing system used for risk management.

• non-audit services provided do not under-

mine the general principles relating to auditor
independence as set out in APES 110 Code of
Ethics for Professional Accountants, as they did
not involve reviewing or auditing the auditor’s
own work, acting in a management or deci-
sion-making capacity for the Company, acting
as an advocate for the Company or jointly
sharing risks and rewards.

A copy of the auditor’s independence declaration
as required under section 307C of the Corporations
Act 2001 is on page 38.

Rounding of amounts
ASX is a company of the kind referred to in ASIC
Class Order 98/100 dated 10 July 1998. In accord-
ance with that class order, amounts in the financial
statements and the directors’ report have been
rounded to the nearest hundred thousand dollars,
unless otherwise indicated.

Signed in accordance with a resolution of the
directors:

Non-audit services
During the year PricewaterhouseCoopers (PwC),
the Company’s auditor, performed certain ‘non-au-
dit services’ in addition to its statutory duties.
Details of the amounts paid to PwC and its related
practices for audit and non-audit services provided
during the year are set out in the following table.

In addition to the above, total audit fees of $28,200
(2014: $27,500) and tax compliance fees of $18,105
(2014: $18,105) were received by the auditor in rela-
tion to Securities Exchanges Guarantee Corporation
Limited (SEGC), National Guarantee Fund (NGF),
ASX Division 3 Compensation Fund and the Sydney
Futures Exchange Limited Fidelity Fund, which are
not consolidated as part of the Group.

Directors’ declaration of satisfaction
with independence of auditor
The Board of directors has considered the non-au-
dit services provided during the year by the auditor
and in accordance with written advice provided by
resolution of the Audit and Risk Committee, is satis-
fied that the provision of those non-audit services
during the year by the auditor is compatible with,
and did not compromise, the auditor independence
requirements of the Corporations Act 2001 for the
following reasons:

• non-audit services were subject to the corpo-
rate governance procedures adopted by the
Group and have been reviewed by the Audit
and Risk Committee

Rick Holliday-Smith
Chairman

Elmer Funke Kupper
Managing Director and Chief Executive Officer

Sydney, 20 August 2015

ASX Annual Report 2015 | Directors’ report

Auditor’s
independence
declaration

As lead auditor for the audit of ASX Limited for
the year ended 30 June 2015, I declare that to the
best of my knowledge and belief, there have been:

a. no contraventions of the auditor independ-
ence requirements of the Corporations Act
2001 in relation to the audit; and

b. no contraventions of any applicable code of
professional conduct in relation to the audit.

This declaration is in respect of ASX Limited and
the entities it controlled during the period.

Matthew Lunn
Partner

PricewaterhouseCoopers

Sydney, 20 August 2015

PricewaterhouseCoopers, ABN 52 780 433 757
Darling Park Tower 2, 201 Sussex Street,

GPO BOX 2650, SYDNEY NSW 1171

T: +61 2 8266 0000

F: +61 2 8266 9999

www.pwc.com.au

Liability limited by a scheme approved under

Professional Standards Legislation.

ASX Annual Report 2015 | Auditor’s independence declaration

Consolidated
statement of
comprehensive
income

For the year ended 30 June

Revenue
Listings and issuer services

Cash market

Derivatives and OTC markets

Information services

Technical services

Austraclear

Interest income

Dividend income

Share of net profit of equity accounted investments

Other

Expenses
Staff

Occupancy

Equipment

Administration

Finance costs

Depreciation and amortisation

Profit before income tax expense

Income tax expense

Net profit for the period attributable to owners of the Company

Other comprehensive income

Items that may be reclassified to profit or loss:
Change in the fair value of available-for-sale investments

Change in the fair value of available-for-sale financial assets

Change in the fair value of cash flow hedges

Other comprehensive income for the period, net of tax

Total comprehensive income for the period
attributable to owners of the Company

Earnings per share

Basic earnings per share (cents per share)

Diluted earnings per share (cents per share)

The consolidated entity consists of ASX Limited
(ASX or the Company) and its subsidiaries
(together referred to as the Group). Items
included in the financial statements for each
of the Group’s entities are measured using the
currency of the primary economic environment
in which the entity operates (the functional
currency). These financial statements are
presented in Australian dollars which is the
Group’s functional and presentation currency.
Foreign currency transactions are translated
using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and
losses resulting from the settlement of such
transactions, and from the translation at period
end exchange rates of monetary assets and
liabilities denominated in foreign currencies are
recognised in profit or loss, except where they
are deferred in equity as qualifying cash flow
hedges (refer note B3(a)(ii)).

Goods and services tax (GST) Revenues and
expenses are recognised net of the amount of
GST, except where the amount of GST is not
recoverable from the taxation authority. In these
circumstances the GST is recognised as part of
the item of expense to which it relates.

Note

2015
$m

178.1

125.2

206.5

73.7

58.2

45.4

151.4

12.7

0.3

16.5

868.0

(104.1)

(13.7)

(25.3)

(27.8)

(92.3)

(38.6)

(301.8)

566.2

(168.4)

397.8

41.4

0.7

0.8

42.9

440.7

205.7

2014
$m

156.9

117.3

207.9

68.8

54.2

41.1

135.6

10.8

15.9

808.5

(92.4)

(14.3)

(24.2)

(26.5)

(75.7)

(33.8)

(266.9)

541.6

(158.4)

383.2

15.8

(1.3)

14.5

397.7

198.5

ASX Annual Report 2015 | Consolidated statement of comprehensive income

Consolidated
balance sheet

Goods and services tax (GST) Assets are recog-
nised net of the amount of GST, except where
the amount of GST is not recoverable from the
taxation authority. In these circumstances the
GST is recognised as part of the cost of acquisi-
tion of the asset. Receivables and payables are
stated with the amount of GST included. The net
amount of GST recoverable from, or payable to,
the taxation authority is included as a current
asset or liability.

As at 30 June

Current assets
Cash and funds on deposit

Available-for-sale financial assets

Receivables

Prepayments

Total current assets

Non-current assets
Investments in listed entities

Equity accounted investments

Intangible assets - goodwill

Intangible assets - software

Property, plant and equipment

Total non-current assets

Total assets

Current liabilities
Amounts owing to participants

Payables

Current tax liabilities

Provisions

Revenue received in advance

Other liabilities

Total current liabilities

Non-current liabilities
Amounts owing to participants

Net deferred tax liabilities

Provisions

Revenue received in advance

Total non-current liabilities

Total liabilities

Net assets

Equity
Issued capital

Retained earnings

Restricted capital reserve

Asset revaluation reserve

Equity compensation reserve

Total equity

Note

C2.1

C2.2

2015
$m

2014
$m

1,989.4

2,889.6

328.6

9.4

5,217.0

311.1

65.7

2,317.6

92.4

54.8

2,841.6

8,058.6

3,686.2

312.5

13.1

13.6

18.0

0.1

2,607.8

2,407.8

274.1

9.7

5,299.4

250.5

2,317.6

88.7

52.6

2,709.4

8,008.8

3,786.1

242.6

42.3

13.3

14.8

0.1

4,043.5

4,099.2

200.0

44.3

10.9

0.2

255.4

4,298.9

3,759.7

3,027.2

526.3

71.5

125.4

9.3

3,759.7

200.0

25.7

12.8

0.2

238.7

4,337.9

3,670.9

3,027.2

480.9

71.5

82.5

8.8

3,670.9

ASX Annual Report 2015 | Consolidated balance sheet

Asset
revaluation
reserve
$m

Equity
compensation
reserve
$m

Consolidated
statement of
changes in
equity

Note

E5.2

For the year ended 30 June 2015
Opening balance at 1 July 2014
Profit for the year

Other comprehensive income for the year

Total comprehensive income for the year, net of tax

Transactions with owners in their capacity as owners:
Employee share schemes - value of employee services

Dividends paid

Closing balance at 30 June 2015

For the year ended 30 June 2014

Opening balance at 1 July 2013
Profit for the year

Other comprehensive income for the year

Total comprehensive income for the year, net of tax

Issued
capital
$m

3,027.2
-

3,027.2

2,746.4
-

Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs

280.8

Employee share schemes - value of employee services

E5.2

Dividends paid

Closing balance at 30 June 2014

3,027.2

Retained
earnings
$m

480.9
397.8

397.8

(352.4)

526.3

427.6
383.2

383.2

(329.9)

480.9

Restricted
capital
reserve
$m

71.5
-

71.5

71.5
-

82.5
-

42.9

125.4

68.0
-

14.5

71.5

82.5

Total
equity
$m

3,670.9
397.8

42.9

440.7

0.5

(352.4)

3,759.7

3,321.8
383.2

14.5

397.7

280.8

0.5

(329.9)

3,670.9

8.8
-

0.5

9.3

8.3
-

0.5

8.8

Restricted capital reserve The restricted capital
reserve was created when funds were transferred
from the National Guarantee Fund to ASX Clear
Pty Ltd (ASX Clear) in 2005. Under the terms of the
transfer, ASX Clear must not, without first obtain-
ing the consent in writing of the Assistant Treasurer
(the Minister), take action to use these funds for
a purpose other than clearing and settlement
support.

Asset revaluation reserve Changes in the fair value of financial assets includ-
ing investments, available-for-sale assets and assets designated as part of
cash flow hedging relationships, are taken to the asset revaluation reserve.
Amounts are recognised in profit or loss when the associated investments and
available-for-sale assets are sold or impaired or to the extent that the cash
flow hedges are ineffective.

The movement in the asset revaluation reserve is primarily due to the change
in market value of investments in listed entities (refer note C2.1).

Equity compensation
reserve The equity
compensation reserve
is used to recognise
the fair value of perfor-
mance rights issued
under the ASX Long-
Term Incentive (LTI) plan.

ASX Annual Report 2015 | Consolidated statement of changes in equity

Consolidated
statement of
cash flows

For the year ended 30 June

Cash flows from operating activities
Receipts from customers (inclusive of GST)

Payments to suppliers and employees (inclusive
of GST)

Note

2015
$m

Interest received

Interest paid

Dividends received

Income taxes paid

Net cash inflow from operating activities

Cash flows from investing activities
(Decrease)/increase in participants’ margins and
commitments

Payments for equity accounted investments

Payments for investments in listed entities

C2.2

C2.1

Payments for other non-current assets

Net cash (outflow)/inflow from investing activities

756.1

(210.4)

545.7
153.0

(92.2)

12.7

(197.4)

421.8

(126.8)

(65.3)

(1.6)

(41.5)

(235.2)

(352.4)

2014
$m

714.5

(219.4)

495.1
141.6

(77.3)

10.8

(145.3)

424.9

189.9

(42.2)

(42.3)

105.4

277.9

(329.9)

(52.0)

For the year ended 30 June

Reconciliation of the operating profit after income tax
to the net cash flows from operating activities

Net profit after tax

Non-cash items:
Depreciation and amortisation

Share-based payments

Net loss on disposal and impairment of non-current
assets

Share of net profit of equity accounted investments

Tax on fair value adjustment of available-for-sale financial
assets

Tax on fair value adjustment of cash flow hedges

Changes in operating assets and liabilities:
(Decrease)/increase in tax balances

(Increase)/decrease in current receivables

Decrease/(increase) in prepayments

Increase/(decrease) in payables

Increase/(decrease) in revenue received in advance

(Decrease) in other non-current liabilities

Increase/(decrease) in current provisions

(Decrease) in non-current provisions

2015
$m

2014
$m

397.8

383.2

38.6

0.5

(0.3)

(28.4)

(7.8)

0.3

20.1

3.2

0.3

(1.9)

33.0

0.5

0.8

0.5

12.5

4.9

(1.7)

(3.2)

(1.9)

(3.2)

(0.1)

(0.4)

Net cash inflow from operating activities

421.8

424.9

Cash and cash equivalents includes all cash and funds on deposit and avail-
able-for-sale financial assets. Cash flows are reported on a gross basis. The
GST components of cash flows arising from investing and financing activities
which are recoverable from, or payable to, the taxation authority are classi-
fied as operating cash flows.

(165.8)

478.3

2.3

26.9

(1.9)

43.0

5,015.6

4,496.2

4,879.0

5,015.6

992.8

3,886.2

4,879.0

1,029.5

3,986.1

5,015.6

Cash flows from financing activities
Proceeds from issues of shares

Dividends paid

Net cash (outflow) from financing activities

Net (decrease)/increase in cash and cash
equivalents

Increase/(decrease) in fair value of cash and cash
equivalents

Increase in cash and cash equivalents due to
changes in foreign exchange rates

Cash and cash equivalents at the beginning of the
financial period

Cash and cash equivalents at the end of the finan-
cial period

Cash and cash equivalents consist of:
ASX Group funds

Participants’ margins and commitments

Total cash and cash equivalents

ASX Annual Report 2015 | Consolidated statement of cash flows

Preface to
the notes
to the
financial
statements

Key judgements and estimates
In the process of applying the Group’s account-
ing policies, management has made a number of
judgements and applied estimates of future events.

Judgements and estimates that are material to the
financial report are found in the following notes:

• C1 Intangible assets – goodwill

• C2 Investments

• D2 Intangible assets – software.

The notes to the financial statements have been
reordered based on relevance to provide more
useful information to users of the financial state-
ments. Significant accounting policies and key
judgements and estimates are contained in shaded
text and are included within the relevant note.
These policies have been consistently applied to all
years presented, unless otherwise stated.

ASX is a for-profit company limited by shares incor-
porated and domiciled in Australia.

The consolidated financial statements of the Group
for the year ended 30 June 2015 were authorised
for issue by the Board of directors on 20 August
2015. The directors have the power to amend and
reissue the financial statements.

The financial statements are general purpose finan-
cial statements that:

• have been prepared in accordance with

the requirements of the Corporations Act
2001, Australian Accounting Standards and
other authoritative pronouncements of the
Australian Accounting Standards Board
(AASB) and International Financial Reporting
Standards (IFRS) as issued by the International
Accounting Standards Board (IASB)

• include the assets and liabilities of all subsid-
iaries of the Company as at 30 June 2015 and
the results of the subsidiaries for the year then
ended. Unrealised gains and losses on inter-en-
tity balances resulting from transactions with,
or between, subsidiaries are eliminated in full
on consolidation

• have been prepared on a historical cost basis,
except for available-for-sale financial assets
and investments in listed entities, which have
been measured at fair value

• are presented in Australian dollars (being

ASX’s functional and presentation currency)
with all values rounded to the nearest hundred
thousand dollars unless otherwise stated, in
accordance with ASIC Class Order 98/100.

C O N T E N T S

Performance of the Group
44 | A1 Segment reporting

46 | A2 Dividends

46 | A3 Capital management

47 | A4 Earnings per share

47 | A5 Taxation

Risk management
48 | B1 Clearing risk

49 | B2 Cash and funds on deposit and

available-for-sale financial assets

49 | B3 Financial risk management

Investments
54 | C1 Intangibles – goodwill

54 | C2 Investments

54 | C2.1 Investments in listed entities

54 | C2.2 Equity accounted investments

Other balance sheet assets and liabilities
55 | D1 Receivables
55 | D2 Intangible assets – software

56 | D3 Property, plant and equipment

57 | D4 Payables

57 | D5 Provisions

Group disclosures
58 | E1 Subsidiaries

58 | E2 Deed of Cross Guarantee

59 | E3 Related party transactions

59 | E4 Parent entity financial information

60 | E5 Other disclosures

60 | E5.1 Commitments

60 | E5.2 Share-based payments

61 | E5.3 Key Management Personnel

remuneration

61 | E5.4 Auditor’s remuneration

61 | E5.5 Other accounting policies

62 | E5.6 Subsequent events

ASX Annual Report 2015 | Preface to the notes to the financial statements

Performance
of the Group

A1 Segment reporting

(a) Description of segment
Operating segments are reported in a manner
consistent with the internal reporting provided to
the Chief Operating Decision Maker (CODM). The
CODM, who is responsible for allocating resources
and assessing performance of the operating
segments, has been identified as the Managing
Director and CEO.

The Managing Director and CEO assesses perfor-
mance of the Group as a single segment, being a
vertically integrated organisation (eg providing
services to the primary and secondary financial
markets as well as post-trade activities) that
provides a multi-asset class product offering.

Vertical integration includes the:

• listing and issuer services offered to public

companies and other issuers

• trading venue or exchange activities for trading

• clearing and settlement activities

• exchange-traded and over-the-counter (OTC)

products.

Multi-asset class service offerings include equities,
interest rate, commodity and energy products
across cash and derivatives markets.

In addition to reviewing performance based on
statutory profit after tax, the CODM assesses the
performance of the Group based on underlying
profit after tax. This measure excludes amounts
regarded as significant items of revenue and
expense such as those that may be associated
with significant business restructuring or indi-
vidual transactions of an infrequent nature. A
restructure charge of $7.7 million, classified as
significant items, was recognised in this financial
year to support the technology transformation
program and other organisational changes. There
were no items reported as significant in the prior
financial year.

Group performance measures including earn-
ings before interest and tax (EBIT) and earnings
before interest, tax, depreciation and amortisa-
tion (EBITDA), are also reviewed by the CODM. In
assessing performance, doubtful debt provisions
and arrangements where revenue is shared with
external parties are reclassified from expenses to
operating revenue; certain expenses are reclassi-
fied within operating expenses; and gross interest
income and expense is reclassified to net inter-
est income. The reporting provided to the CODM
presents interest income net of interest expense.

(b) Segment results
The information provided on a regular basis to
the CODM, along with a reconciliation to statu-
tory profit after tax for the period attributable
to owners of the Company, is presented on the
following page.

ASX derives all external customer revenue within
Australia and some services are accessible offshore.

No single customer generates revenue greater than
10% of the Group’s total revenues.

Revenue is measured at the fair value of the
consideration received or receivable, net of
rebates. Revenue is recognised when it can be
reliably measured, and when it is probable that
the economic benefits will flow to the Group.
Revenue is recognised for the major revenue
lines as shown below.

• Listings and issuer services includes listing

fees and other issuer services revenue. Initial
and subsequent listing fees are recognised
when the listing or subsequent event has
taken place. Annual listing fees are recognised
on a pro rata basis over the financial year to
which they relate. Unamortised balances are
recognised as deferred revenue on the balance
sheet. Issuer services revenue includes reve-
nue for the provision of holding statements
and other related activities, and is recognised
in the period that the service is provided.

• Cash market includes revenue from trading,

clearing and settlement of equities, warrants,
exchange-traded funds and interest rate

products. Transaction revenue is recognised at
settlement date. The normal market conven-
tion is that settlement occurs three days after
the initial trade date. Accordingly, revenue for
trades transacted in the last three days prior
to period end are recognised in the subse-
quent reporting period (settlement date).

• Derivatives and OTC markets includes reve-

nue from trading and clearing of futures and
options, as well as clearing of OTC interest rate
swaps. Transaction revenue is recognised at
trade date.

• Information services includes the provision of
market data, whereby revenue is recognised
over the period the service is provided.

• Technical services includes liquidity access,
community and connectivity, application
services and hosting, whereby revenue is
recognised over the period the service is
provided.

• Austraclear revenue from depository, regis-
try and settlement fees is recognised over
the period the service is provided. This may
involve deferring a portion of the revenue to
future reporting periods.

Dividend income is recognised when the right to
receive the dividend has been established.

Interest income comprises interest earned on the
Group’s own funds and restricted capital reserve,
as well as interest earned from the investment
of funds lodged by participants as collateral.
Interest income is recognised using the effective
interest method.

Interest expense is recognised as a finance cost
in the statement of comprehensive income using
the effective interest rate method.

ASX Annual Report 2015 | Performance of the Group

Segment
information
$m

Adjustments
$m

Consolidated
income statement
$m

Segment result
Year ended 30 June 2015
Revenue

Listings and issuer services

Cash market

Derivatives and OTC markets

Information services

Technical services

Austraclear

Other

Operating revenues
Interest income

Dividend income

Share of net profit of equity accounted investments

Total revenue

Expenses
Staff

Occupancy

Equipment

Administration

Variable

ASIC supervision levy

Operating expenses

EBITDA
Finance costs

Depreciation and amortisation

Total expenses

EBIT

Net interest and dividend income
Net interest income

Net interest on participant balances

Dividend income

Net interest and dividend income

Underlying profit before tax

Income tax expense

Underlying profit after tax

Significant items

Tax on significant items

Net profit after tax

176.6

125.2

206.2

73.7

57.3

45.3

16.4

700.7

(96.4)

(13.7)

(24.0)

(17.2)

(5.1)

(3.7)

(160.1)

540.6
-

(38.6)

502.0

26.9

32.3

12.7

71.9

573.9

(170.7)

403.2

(7.7)

2.3

397.8

1.5

0.3

0.9

0.1

151.4

12.7

0.3

167.3

(7.7)

(1.3)

(10.6)

5.1

3.7

(92.3)

(103.1)

(26.9)

(32.3)

(12.7)

(71.9)

(7.7)

2.3

(5.4)

7.7

(2.3)

Segment result
Year ended 30 June 2015
Revenue

Listings and issuer services

Cash market

Derivatives and OTC markets

Information services

Technical services

Austraclear

Other

Operating revenues
Interest income

Dividend income

178.1

125.2

206.5

73.7

58.2

45.4

16.5

151.4

12.7

0.3

868.0

Total revenue

(104.1)

(13.7)

(25.3)

(27.8)

(92.3)

(38.6)

Expenses
Staff

Occupancy

Equipment

Administration

Variable

ASIC supervision levy

Operating expenses

EBITDA
Finance costs

Depreciation and amortisation

(301.8)

Total expenses

EBIT

Net interest and dividend income
Net interest income

Net interest on participant balances

Dividend income

Net interest and dividend income

566.2

Net profit before tax

(168.4)

Income tax expense

397.8

Net profit after tax

Segment
information
$m

Adjustments
$m

Consolidated
income statement
$m

154.9

117.3

207.7

68.8

52.9

41.1

15.6

658.3

(92.4)

(14.3)

(23.0)

(16.3)

(4.3)

(3.3)

(153.6)

504.7
-

(33.8)

470.9

28.6

31.3

10.8

70.7

541.6

(158.4)

383.2

2.0

0.2

1.3

0.3

135.6

10.8

150.2

(1.2)

(10.2)

4.3

3.3

(75.7)

(79.5)

(28.6)

(31.3)

(10.8)

(70.7)

156.9

117.3

207.9

68.8

54.2

41.1

15.9

135.6

10.8

808.5

(92.4)

(14.3)

(24.2)

(26.5)

(75.7)

(33.8)

(266.9)

541.6

(158.4)

383.2

ASX Annual Report 2015 | Performance of the Group

A2 Dividends

Dividend franking account

Dividends recognised and paid by ASX for the finan-
cial years ended 30 June 2015 and 2014:

2015
Final dividend for the year
ended 30 June 2014

Interim dividend for the
year ended 30 June 2015

Total amount

2014
Final dividend for the year
ended 30 June 2013

Interim dividend for the
year ended 30 June 2014

Total amount

Cents per
share

Total
amount
$m

89.9

174.0

92.3

178.7

182.2

352.7

82.3

159.3

88.2

170.8

170.5

330.1

The above dividends paid by the Company
include amounts attached to certain shares held
by the Group’s Long-Term Incentive Plan Trust (LTIP).
The dividend revenue recognised by LTIP of $0.3
million (2014: $0.2 million) has been eliminated
on consolidation.

Since the end of the financial year, the directors
have determined the below dividend. The dividend
will be fully franked based on tax paid at 30%.

Final dividend for the year
ended 30 June 2015

Total amount

Cents per
share

Total
amount
$m

95.1

184.1

The Board’s policy is to pay a dividend based on
90% of underlying net profit after tax. A liability
is recognised for the amount of any dividends
determined on or before the end of the financial
year but not paid at balance sheet date. Typically,
the interim and final dividends in respect of a
financial period are determined after period end,
and are therefore not included as a provision at
year end.

Company
Franking credits available for future
years at 30% adjusted for the
payment of current income tax

2015
$m

2014
$m

201.0 169.0

Adjusting for the payment of the final dividend for
the year ended 30 June 2015, the franking balance
would be $122.1 million (2014: $94.5 million).

A3 Capital management

At 30 June 2015, equity of the Group totalled
$3,759.7 million (2014: $3,670.9 million). The Group’s
capital supports a range of activities with require-
ments subject to change from time to time. Some
factors that may impact the amount of capital the
Group requires to support its business include:

• regulatory standards, both domestic and

international, which may impact on the level
of capital supporting the clearing and settle-
ment activities or other licensed activities.
Regulatory standards applying to many
financial market participants have increased in
recent years and there is an expectation that
these may increase further over time. There
may also be uncertainty over the application of
new regulatory standards

• the competitive environment in which ASX

operates may lead to higher levels of capital in
order to provide competitive services, noting
that customers may be able to access compet-
ing services internationally

• the level of activity undertaken in markets and
clearing and settlement facilities operated by
ASX. Generally the higher level of activity may
result in higher capital requirements, however
the relationship is not necessarily linear

• the general economic or credit conditions

that may impact on capital requirements as
the level of risk generally increases as credit
conditions deteriorate. The level of operational
risk capital held by the Group can be impacted
by any revision to future loss assessments and
regulatory requirements

• the level of investments made, their market
value and the potential movement in their
market values. Capital requirements may also
be impacted by ASX’s level of investment in
existing or new services.

In the prior financial year, the Group completed
the retail component of its pro rata accelerated
renounceable entitlement offer. This resulted in
the issue of 9,528,398 ordinary shares for gross
proceeds of $285.9 million.

The Board’s policy is to maintain an appropriate
level of capital within the Group and relevant
subsidiaries with the objectives of:

• meeting its compliance obligations with

respect to the Financial Stability Standards,
and other regulations, including international,
as required by the various licences held

• sustaining prudential stability through

maintaining an adequate level of equity at the
Group level, cognisant of the fact that a signifi-
cant allocation of capital supports the activi-
ties of the two licensed central counterparty
(CCP) clearing subsidiaries as discussed in note
B1 and the two licensed settlement facilities

• facilitating growth of the Group’s exchange-
traded and OTC markets, and provide appro-
priate risk adjusted returns to shareholders.

In accordance with the Group’s objectives and
policies, capital represented by cash is invested
at an appropriate liquidity profile, taking into
consideration the potential claims on that equity
that may arise from the Group’s activities,
predominantly central counterparty clearing.

(a) Movements in ordinary share capital

Opening balance at 1 July
Rights issue

Less: transaction costs
relating to the rights issue

Deferred tax credit recog-
nised directly in equity

2015
$m

3,027.2
-

2014
$m

2,746.4
285.9

(7.2)

2.1

Closing balance at 30 June

3,027.2

2015
No. of
shares

2014
No. of
shares

Opening balance at 1 July
Rights issue

193,595,162 184,066,764
9,528,398

Closing balance at 30 June

193,595,162 193,595,162

Fully paid ordinary shares carry the right to
participate in dividends. Ordinary shares also
entitle the holder to the proceeds on winding up
of the Company in proportion to the number of
and amounts paid on the shares held. Ordinary
shares have no par value and ASX does not
have a limited amount of authorised capital. At
30 June 2015, all ordinary shares issued were
fully paid. On a show of hands, every holder of
ordinary shares present in person or by proxy, is
entitled to one vote, and upon a poll each share
is entitled to one vote.

Ordinary shares are classified as equity.
Incremental costs directly attributable to the
issue of new shares or options are shown in
equity as a deduction from the proceeds, net of
tax.

Dividend reinvestment plan shares allotted to
ASX shareholders as part of the dividend rein-
vestment plan (DRP) at the DRP allocation price
are classified as fully paid ordinary shares.

(b) Treasury shares

Number of shares as at 1 July
Issue of deferred shares under
the LTI plan

2015
No. of
shares

2014
No. of
shares

(181,269)

Number of shares as at 30 June (181,269)

(181,269)

The cost of treasury shares at 30 June 2015 was
$8.0 million (2014: $8.0 million).

The LTIP holds treasury shares for the benefit of
employees under the ASX LTI plan as described
in the remuneration report. The shares, net of
any tax effect, are deducted from the equity
compensation reserve in equity.

ASX Annual Report 2015 | Performance of the Group

A4 Earnings per share

Basic and diluted earnings
per share (cents)

2015

205.7

2014

198.5

The following reflects the share data used in the
calculation of basic and diluted earnings per share:

Weighted average number
of ordinary shares used
in calculating basic and
diluted earnings per share

193,413,893 193,022,315

The basic and diluted earnings per share (EPS)
amounts have been calculated on the basis of net
profit after tax of $397.8 million (2014: $383.2
million).

Basic earnings per share is calculated by divid-
ing the consolidated profit attributable to the
owners of the Company, excluding any costs of
servicing equity other than ordinary shares, by
the weighted average number of ordinary shares
outstanding during the financial year, adjusted
for bonus elements in ordinary shares issued
during the year and excluding treasury shares.

Diluted earnings per share adjusts the figures
used in the determination of basic EPS to take
into account the after income tax effect of
interest and other financing costs associated
with dilutive potential ordinary shares, and the
weighted average number of additional ordi-
nary shares that would have been outstanding
assuming the conversion of all dilutive potential
ordinary shares.

A5 Taxation
The movements during the year in the following
components of deferred tax asset and liability
were recognised in profit or loss with the exception
of revaluations of investments, available-for-sale
financial assets and cash flow hedges, which were
recognised in other comprehensive income.

(a) Income tax expense
Profit before income tax expense
Prima facie income tax expense calculated at 30% (2014: 30%) on the profit before tax

Movement in income tax expense due to:
Non-deductible items
Non-assessable items
Franking credit offset
Research and development tax offset
Adjustments to current tax for prior periods
Total income tax expense

(b) Major components of income tax expense
Current tax expense
Movement in deferred tax liability
Movement in deferred tax asset
Adjustments for current tax of prior periods
Total income tax expense

(d) Income tax on items recognised directly in other comprehensive income
Revaluation of investments in listed entities
Revaluation of available-for-sale financial assets
Revaluation of cash flow hedges
Total

2015
$m

2014
$m

566.2
(169.9)

541.6
(162.5)

(0.3)
0.1
1.5
-
0.2
(168.4)

(168.4)
0.6
(0.8)
0.2
(168.4)

-
-

(17.8)
(0.3)
(0.3)
(18.4)

(0.2)
-
2.7
0.6
1.0
(158.4)

(155.6)
(3.4)
(0.4)
1.0
(158.4)

2.1
2.1

(6.8)
-
0.6
(6.2)

(e) Deferred tax asset/(liability)
Deferred tax asset comprises the estimated future benefit at an income tax rate of 30% (2014: 30%) of the below items:
Provisions for:
Doubtful debts
Employee entitlements
Premises provisions
Accrued expenses
Revenue received in advance
Revaluation of cash flow hedges
Deferred tax asset

0.5
9.9
3.1
2.6
4.0
-
20.1

0.4
9.5
3.5
3.9
3.6
0.1
21.0

Deferred tax liability comprises the estimated future expense at an income tax rate of 30% (2014: 30%) of the following items:
(11.0)
Fixed assets
(35.1)
Revaluation of investments in listed entities
(0.3)
Revaluation of available-for-sale financial assets
Revaluation of cash flow hedges
-
(0.3)
Long-term incentive plan
(46.7)
Deferred tax liability

(10.4)
(52.9)
(0.6)
(0.2)
(0.3)
(64.4)

Net deferred tax liability

(44.3)

(25.7)

Income tax expense is recognised in profit or
loss except to the extent that it relates to items
recognised in other comprehensive income or
directly in equity. In this case, the tax is also
recognised in other comprehensive income
or directly in equity respectively. Income tax
expense recognised in profit or loss comprises
current and deferred income tax.

Current tax is the expected tax payable on the
taxable income for the year, using tax rates
enacted or substantively enacted at the balance
sheet date, and any adjustment to tax payable
in respect of previous years. Current tax assets
and tax liabilities are offset if there is a legally
enforceable right to offset and the Group intends
to either settle on a net basis, or to realise the
asset and settle the liability simultaneously.

Deferred income tax is provided using the
balance sheet liability method, providing for
temporary differences between the carrying
amounts of assets and liabilities for financial
reporting purposes, and the amounts used for
taxation purposes. Deferred income tax is not
recognised for certain temporary differences
such as the initial recognition of goodwill.

The amount of deferred income tax is deter-
mined using tax rates enacted or substantively
enacted at the balance sheet date and expected
to apply when the related deferred income tax
asset is realised or the deferred income tax
liability is settled.

A deferred tax asset is recognised only to the
extent that it is probable that future taxable
amounts will be available against which the
asset can be utilised, and is reduced to the extent
that it is no longer probable that the related tax
benefit will be realised.

Deferred tax assets and liabilities are offset
if there is a legally enforceable right to offset
current tax liabilities and assets, and when the
deferred tax balances relate to income taxes
levied by the same tax authority.

ASX Annual Report 2015 | Performance of the Group

Risk
management

Some of the risks the Group is exposed to include
clearing and settlement risk and operational risk.
ASX settles equity (on average $4.3 billion per
day) and debt instrument (on average $62.6 billion
per day) transactions on a ‘delivery-versus-pay-
ment’ basis. Settlement errors expose the Group
to potenital financial and reputational losses.
Operational incidents or errors can impact on the
financial performance of the Group and adversely
affect its reputation.

B1 Clearing risk

At 30 June, participants’ margins and commitments
recognised on balance sheet comprised of:

Cash

Debt securities

Current amounts
owing to participants
Participant financial backing

Non-current amounts
owing to participants

Total participants’
margins and commitments

2015
$m
3,595.1

2014
$m
3,668.1

91.1

118.0

3,686.2

3,786.1

200.0

3,886.2

3,986.1

Current amounts owing to participants represent
collateral lodged to cover margin requirements
on unsettled derivative contracts and cash
market trades. Non-current amounts owing to
participants represent cash balances deposited
by participants as commitments to clearing
guarantee funds, which at reporting date had no
determined repayment date.

Subsections (a) and (b) below discuss participants
obligations and the nature of collateral lodged
and commitments, as well as ASX’s recognition
principles concerning these liabilities.

(a) Novation
The Group has the following wholly-owned subsid-
iaries that provide CCP clearing services:

• ASX Clear Pty Limited (ASX Clear), which

provides novation of cash market securities
and derivatives

• ASX Clear (Futures) Pty Limited (ASX Clear
(Futures)), which provides novation of both
exchange-traded and OTC derivatives.

Transactions between two clearing participant
organisations are replaced by novation. This makes
the CCPs contractually responsible for the obliga-
tions entered into by clearing participants on ASX
and other markets, on both the buying and selling
legs of the same transaction. Through novation,
the respective CCP assumes the credit risk of the
underlying clearing participant in the event of a
participant default. The novation process results
in all positions held by the CCPs being matched.

(b) Participants margins
Clearing participants are required to lodge an
amount (initial margin) on open cash market and
derivative positions novated to the Group’s CCPs.
These margins are based on risk parameters
attached to the underlying product at trade date.
These are subject to regulatory standards includ-
ing a high level of confidence based on historical
events, however there could be circumstances
where losses are greater than the margins held.

In addition to the initial margin, participants must
also settle changes in the fair value of derivatives
contracts (variation margin). Participants must
settle both initial and variation margins daily. The
amounts owing to participants are repayable on
settlement or closure of the contracts.

Margins which are settled by cash or debt securi-
ties are recognised on balance sheet at fair value
and are classified as amounts owing to partici-
pants within current liabilities. Balances lodged
in cash are interest bearing and are carried at the
amounts deposited which represent fair value.
Margins which are settled by bank guarantees or
equity securities are not recognised on balance
sheet as the Group is not party to the contractual
provisions of the instruments other than in the
event of a default.

In the event of default by a clearing participant on
its obligations under contracts, ASX Clear and ASX
Clear (Futures) have the authority to retain collat-
eral deposited by the defaulting clearing participant
to satisfy its obligations.

As at 30 June, collateral lodged by clearing
participants was as follows:

ASX Clear

ASX Clear
(Futures)

2015
$m

2014
$m

2015
$m

2014
$m

Cash

673.7

549.8 2,921.4 3,118.3

Bank guarantees

16.0

15.7

Equity securities

3,625.2 4,289.3

Debt securities

91.1

118.0

All net delivery and net payment obligations relat-
ing to cash market and derivative securities owing
to or by participants as at 30 June 2015 were subse-
quently settled.

(c) Financial resources available
to central counterparties
In accordance with the Financial Stability Standards,
each CCP must have adequate financial resources
to support the loss of the two participants with the
largest exposures in extreme but plausible circum-
stances. Financial resources include the below
mentioned resources as well as collateral lodged
by participants. The level of financial resources may
therefore increase from time to time. The Group
may utilise a number of alternatives to provide
these financial resources including its own cash
reserves.

ASX Clear

Restricted capital reserve

2015
$m

71.5

2014
$m

71.5

Equity provided by the Group

103.5

Subordinated debt provided
by the Group

75.0

Paid in resources

250.0

Emergency assessments

300.0

Total financial resources

550.0

The financial resources at 30 June 2015 available to
ASX Clear in the event of a clearing default would
be applied in the following order.

ASX Annual Report 2015 | Risk management

Application of clearing assets:

1. collateral or other margin or contributions

lodged by the defaulting participant

2. restricted capital reserve of $71.5 million

3. equity capital of $103.5 million and intra-
group subordinated debt of $75.0 million

4. contributions lodged by non-defaulting

participants under the ASX Clear operating
rules. No contributions were lodged in the
current or prior year

5. emergency assessments of $300.0 million
which can be levied on participants (nil has
been levied for periods ending 30 June 2015
and 2014).

ASX Clear (Futures)

Equity provided by the Group

Subordinated debt
provided by the Group

Participant financial backing

Equity provided by the Group

Participant financial backing

Equity provided by the Group

Total financial resources

2015
$m
30.0

2014
$m
30.0

90.0

100.0

150.0

100.0

180.0

650.0

100.0

150.0

100.0

180.0

650.0

5. participant financial backing lodged by partic-

ipants, totalling $100.0 million

6. equity capital of $180.0 million.

With respect to items 3 and 5 above, participant
financial backing refers to commitments provided by
futures participants and OTC participants. A partici-
pant may be both a futures and OTC participant. The
order of application in the event of a default will
depend on the status of the defaulting participant.
Where a participant default is only a single cate-
gory (ie futures or OTC), then the non-defaulting
participants’ commitments from the same cate-
gory are utilised in item 3, with the other category
utilised in item 5. Where a defaulting participant
is a participant in both futures and OTC, the other
non-defaulting participants’ commitments are
apportioned for the purposes of 3 and 5.

B2 Cash and funds on deposit and
available-for-sale financial assets

(a) Cash and funds on deposit

Cash at call

Deposits

Cash and funds on deposit

2015
$m
1,159.4

2014
$m
897.8

830.0 1,710.0

1,989.4 2,607.8

The financial resources at 30 June 2015 available to
ASX Clear (Futures) will be applied in the following
order in the event of a participant default:

(b) Available-for-sale financial assets
Money market instruments – at cost 2,887.5 2,406.9

Revaluation recognised
directly in equity

2.1

0.9

1. collateral and participant financial backing

lodged by the defaulting participant

Available-for-sale financial assets
– at fair value

2,889.6 2,407.8

2. equity capital of $30.0 million and intra-
group subordinated debt of $90.0 million

3. participant financial backing lodged by partic-
ipants, totalling $100.0 million. Any default-
ing participant’s financial backing in this
total will be included in amounts previously
applied as part of (1) above

4. equity capital of $150.0 million

Available-for-sale financial assets comprise short-
term money market investments, including bank
bills, certificates of deposit, bonds and floating rate
notes, and are traded in active markets.

Available-for-sale financial assets are initially
recognised at fair value, being the fair value of
the consideration given plus transaction costs
that are directly attributable to acquiring the
asset. After initial recognition, available-for-sale
financial assets continue to be measured at fair

value as determined by valuation techniques
including discounted cash flow analysis, which
utilises quoted market prices and yields for
similar instruments.

With the exception of impairment losses, gains
or losses are recognised directly in the asset
revaluation reserve in equity until the asset is
derecognised, at which time the cumulative gain
or loss previously recognised in equity is recog-
nised in profit or loss.

Impairment indicators for available-for-sale
assets include a significant or prolonged decline
in the fair value of the security below its cost.
When the asset is considered to be impaired, any
loss that had been recognised directly in equity is
transferred to profit or loss.

The Group holds the following financial assets and
liabilities by category:

As at
30 June 2015

Note

Financial assets

Cash and funds
on deposit

Available
-for-sale
$m

Amortised
cost
$m

Total
$m

1,989.4 1,989.4

Available-for-
sale financial
assets

Receivables

Investments in
listed entities

Total financial
assets

2,889.6

- 2,889.6

C2.1

328.6

311.1

3,200.7

2,318.0 5,518.7

(c) Restricted cash
The Group holds $71.5 million of restricted cash
that is only available for use by the entity in specific
circumstances as described in the policy below the
statement of changes in equity.

Restricted cash is included in the previous table
within cash and funds on deposit and is also recog-
nised as a restricted capital reserve within equity
on the balance sheet.

B3 Financial risk management

The Group’s activities expose it to a variety of finan-
cial risks including market risk (comprising interest
rate, foreign currency and equity price risk), credit
risk and liquidity risk. The maximum exposure to
credit risk at the end of the reporting period is the
carrying amount of each class of financial assets
as detailed on the following table.

Financial liabilities

Payables

Amounts
owing to
participants

Other liabilities

Total financial
liabilities

As at 30 June 2014

Financial assets
Cash and funds
on deposit

Available-for-
sale financial
assets

2,407.8

- 2,407.8

Receivables

274.1

Investments in
listed entities

Total financial
assets

C2.1

250.5

2,658.3

2,881.9 5,540.2

312.5

3,886.2 3,886.2

0.1

4,198.8 4,198.8

2,607.8 2,607.8

The Group’s overall risk management strategy
seeks to manage potential adverse effects
on the financial performance of the Group.
Risk management is carried out under poli-
cies approved by the Board of Directors.
Management monitors investment credit, foreign
currency, market liquidity and cash flow interest
rate risk and manages clearing default credit risk
with counterparties with ongoing reporting to
the respective boards.

Financial liabilities

Payables

Amounts
owing to
participants

Other liabilities

Total financial
liabilities

242.6

3,986.1 3,986.1

0.1

4,228.8 4,228.8

ASX Annual Report 2015 | Risk management

(a) Market risk
Market risk is the risk of loss arising from move-
ments in observable market variables such as
foreign exchange rates, interest rates and other
market prices.

(i) Interest rate risk

Exposure arising from Risk management
Variable rate cash
investments and
money market
instruments expose
the Group to cash flow
interest rate risk.

• Principally managed by
policies that enable the
Group to pay a variable
rate of interest to partici-
pants on the funds held.

Fixed rate money
market instruments
that are carried at
fair value expose the
Group to fair value
interest rate risk.

• The Boards of the relevant
subsidiaries have set limits
with respect to maximum
and weighted average
maturity and value at risk.

Interest bearing assets comprise the investment of
the Group’s cash resources (participant collateral
lodged and Group funds). Interest bearing liabilities
comprise cash collateral and commitment funds
lodged by participants.

The Group’s receivables, investments, payables
and other liabilities are non-interest bearing so
are therefore not subject to interest rate risk,
since neither the carrying amount nor the future
cash flows will fluctuate due to a change in market
interest rates.

The Group’s interest bearing financial assets and
liabilities are shown in the following table.

With respect to the prior table:
• floating interest rate refers to financial

due to a higher/lower interest income on cash and
available-for-sale financial assets.

Floating
interest
rate
$m

Fixed
interest
rate
$m

Total
$m

instruments where the interest rate is subject
to change prior to maturity or repayment,
predominantly deposits at call and floating rate
notes

As at 30 June 2015

Interest bearing financial assets
Cash and funds on
deposit

1,159.4

830.0

1,989.4

Available-for-sale
financial assets

Total interest bearing
financial assets
Weighted average
interest rate
at period end

1,161.0

1,728.6

2,889.6

2,320.4

2,558.6

4,879.0

2.29%

2.74%

3,886.2

Interest bearing financial liabilities
Amounts owing to
participants

3,886.2

1.52%

Total interest bearing
financial liabilities
Weighted average
interest rate
at period end

Net interest bearing
financial
(liabilities)/assets

As at 30 June 2014

(1,565.8)

2,558.6

992.8

Interest bearing financial assets
Cash and funds on
deposit

897.8

1,710.0

2,607.8

Available-for-sale
financial assets

Total interest bearing
financial assets
Weighted average
interest rate
at period end

965.6

1,442.2

2,407.8

1,863.4

3,152.2

5,015.6

2.67%

3.19%

Interest bearing financial liabilities
Amounts owing to
participants

3,986.1

• fixed interest rate refers to financial instru-
ments where the interest rate is fixed up to
maturity, predominantly term deposits, bank
accepted bills, negotiable certificates of deposit
and bonds.

Sensitivity analysis
The Group does not account for any interest bear-
ing financial assets or liabilities at fair value through
profit or loss. As such, any change in fair value that
would result from a change in interest rates at
the end of the reporting period would only affect
profit or loss if a subsequent disposal is made
prior to maturity.

Fair value interest rate risk for fixed rate instru-
ments (net of tax)
At 30 June 2015, if interest rates had increased/
decreased by 25 basis points from year end rates
with all other variables held constant, equity would
have been $830,536 lower/higher (2014: $431,042)
due to a change in fair value of available-for-sale
financial assets.

Fair value interest rate risk for floating rate
instruments (net of tax)
At 30 June 2015, if interest rates had increased/
decreased by 25 basis points from year end rates
with all other variables held constant, equity would
have been $840,703 lower/higher (2014: $650,725)
due to a change in fair value of available-for-sale
financial assets.

Cash flow interest rate risk (net of tax)
At 30 June 2015, if interest rates had increased/
decreased by 25 basis points from year end rates
with all other variables held constant, profit
would be $342,057 lower/higher mainly due to
lower/higher interest income on cash and availa-
ble-for-sale financial assets. In the prior year profit
would have been $523,010 higher/lower mainly

(ii) Foreign currency risk

Exposure arising from Risk management
Foreign currency
transactions
The Group enters into
cash flow commit-
ments in foreign
currencies.

• Where the Group enters
into cash flow commit-
ments in foreign curren-
cies, its policy is to enter
into hedging arrangements
to mitigate the exchange
risk where possible.
• The collateral held in

Clearing operations
The Group’s CCPs
accept and hold
foreign currency as
collateral on clearing
participants’ deriva-
tives exposures.

foreign currency is offset
by an equal payable in
the same currency to the
participant, which reduces
foreign currency risk in the
normal course of business.

The majority of the Group’s foreign currency risk
is associated with foreign denominated cash, net
interest and exchange fees receivable. Such expo-
sure however, is not considered significant and is
converted to Australian dollars (AUD) on a regular
basis.

At 30 June 2015, USD 7.2 million (2014: USD 12.3
million) and EUR 7.5 million (2014: EUR 0.1 million)
were designated by the Group as the hedging
instruments in qualifying cash flow hedges for
committed expenditure to be paid in USD and EUR.
These amounts are included in the following table.
All hedges are expected to be extinguished within
12 months from balance date.

During the current financial year, the use of cash
flow hedges resulted in a $1.2 million reduction
in cash flow required for committed capital and
operating expenses (2014: $1.8 million).

The Group’s exposure to foreign currency risk at the
end of the year, expressed in AUD, was as follows:

Total interest bearing
financial liabilities
Weighted average
interest rate
at period end

Net interest bearing
financial
(liabilities)/assets

ASX Annual Report 2015 | Risk management

3,986.1

1.98%

(2,122.7)

3,152.2

1,029.5

Financial assets:
Cash and funds on deposit

Receivables

Financial liabilities:
Payables

NZD

$m
108.3

0.7

0.3

Amounts owing to participants

108.0

160.4

Net exposure

0.7

9.8

11.0

30 June 2015

USD

$m
170.2

EUR

$m
11.0

30 June 2014

GBP

$m
-

NZD

$m
80.3

0.2

79.7

0.6

USD

$m
257.6

0.1

243.2

14.5

EUR

$m
0.2

GBP

$m
0.1

0.2

0.1

Exchange rate for conversion AUD 1:

1.1218 0.7669 0.6843 0.4875

1.0733 0.9421 0.6904 0.5530

Foreign exchange risk sensitivity analysis (net of tax)
At 30 June 2015, a 10 percent strengthening/weakening of the AUD against any of the above currencies
would have resulted in an immaterial (less then $0.1 million) change in profit or loss in all cases for
both the current and prior year. This analysis assumes all other variables, in particular interest rates,
remain constant.

A 10 percent strengthening/weakening of the AUD against the USD would have decreased/increased
equity by $0.6 million (net of tax) (2014: $0.8 million), as a result of foreign currency cash flow commit-
ments designated as cash flow hedges. A 10 percent strengthening/weakening of the AUD against the
EUR would have decreased/increased equity by $0.7 million (net of tax) (2014: nil), as a result of foreign
currency cash flow commitments designated as cash flow hedges.

The Group documents at the inception of the hedging transaction the relationship between hedging
instruments and hedged items, as well as its risk management objective and strategy for undertaking
various hedge transactions. The Group also documents its assessment, both at hedge inception and also
on an ongoing basis, of whether the instruments that are used in hedging transactions have been, and will
continue to be, highly effective in offsetting changes in cash flows of hedged items.

For cash flow hedges, the effective portion of any change in the fair value of the instrument that is desig-
nated and that qualifies as a cash flow hedge is recognised in the asset revaluation reserve in equity. The
gain or loss relating to the ineffective portion is recognised immediately in the statement of comprehen-
sive income.

(iii) Price risk

Exposure arising from
Equity securities price movements with
respect to the Group’s investments in
listed entities of $311.1 million (2014:
$250.5 million).

Other price movements associated with
underlying equities and derivatives on
trades novated to the CCPs.

Risk management
• Ongoing monitoring of values with respect to any impairment,

with consideration to financial and other implications of holding
instruments.

• Under normal circumstances, this risk is minimal as the trades
are matched. However price movements may impact on credit
risk associated with participant obligations (as discussed in the
following section).

Equity price risk sensitivity analysis (net of tax)
A 10 percent increase/decrease in the price of the Group’s external listed equity investment (refer note
C2.1) at balance date would have increased/decreased equity by $21.8 million (2014: $17.5 million). The
Group does not account for any equity investments at fair value through profit or loss, therefore any
change in fair value that would result from a change in price at the end of the reporting period would
only affect the profit or loss if the investment was subsequently disposed.

(b) Credit risk

Exposure arising from
Clearing participant default credit risk
Through the novation process, the Group
is exposed to the potential loss that may
arise from the failure of a counterparty
to meet its obligations or commitments.
The obligations mainly relate to T+3
settlement risk for cash market trades
and daily mark-to-market movements
on open derivative positions. Failure
to meet these obligations exposes the
Group to potential losses on settlement.

Risk management
• Clearing participant membership requirements and admission

standards, including minimum capital requirements.
• Participant surveillance, including capital monitoring.
• Daily and intraday counterparty credit risk control, including

margining and collateral management.

• Position limits based on the capital of the participant.
• Financial resource adequacy, including fixed capital and

stress-testing of clearing participants’ exposure limits against
the amount and liquidity of variable and fixed financial
resources available.

Investment counterparty credit risk aris-
ing on certain financial assets including
cash, funds on deposit, available-for-sale
financial assets, and trade and other
receivables.

• Board policies that limit the amount of credit exposure and
concentration to any one counterparty, as well as minimum
credit ratings for counterparties. Investments are limited to
non-derivative assets.

• Active debt collection procedures and regular review of the

ageing of trade receivables.

The Group’s ongoing monitoring of participants’ market positions and exposures, coupled with daily
margining and collateral management, including possible intraday and additional margin calls, enables
it to manage its central counterparty credit risk and meet its regulatory obligations. Further informa-
tion on the resources available to the CCPs in the event of a participant default is shown in note B1.

Standard & Poor’s (S&P) credit ratings are used in determining the credit quality of the counterparty
with whom cash and funds on deposit, and available-for-sale financial assets are held. Counterparties
are limited to licensed banks with a minimum short-term credit rating of A1, specific supranational
agencies, Australian state governments and the Commonwealth of Australia.

ASX Annual Report 2015 | Risk management

The Group’s largest single counterparty exposure at the end of the reporting period was $740.6 million
(2014: $1,033.5 million) to an Australian licensed bank with an S&P short-term credit rating of A1+. The
risk ratings of the counterparties to which the Group has exposure at the end of the period are shown
in the following table:

Counterparty credit ratings

2015

Cash and funds on deposit
Bank bills

Negotiable certificates of deposit

Floating rate notes

Bonds

Total available-for-sale financial assets

2014

Cash and funds on deposit
Bank bills

Negotiable certificates of deposit

Floating rate notes

Bonds

Total available-for-sale financial assets

AAA
$m

8.2
-

91.1

2.5
-

247.7

170.0

417.7

A1+
$m

1,396.1
34.9

848.2

935.3

180.4

1,998.8

2,249.3
58.9

488.2

860.1

43.4

1,450.6

A1
$m

585.1
-

569.5

225.7

4.5

799.7

356.0
-

434.0

105.5

539.5

Total
$m

1,989.4
34.9

1,417.7

1,161.0

276.0

2,889.6

2,607.8
58.9

1,169.9

965.6

213.4

2,407.8

The Group does not utilise credit ratings to determine the credit quality of other financial assets,
which includes trade receivables, margins receivable from participants, accrued revenue and interest
receivable. Intercompany receivables consist of balances owing between the entities of the Group and
are eliminated on consolidation. The parent entity considers the credit risk on these balances to be low.

Exposure arising from
Clearing operations of CCPs Margins to cover
derivatives and cash market exposures are
settled with participants and invested in the
short-term money market on a daily basis.
The investment of these balances requires
strict management to provide sufficient
liquidity for the routine daily margin
settlement.

Risk management
• The Board has implemented policies that specify liquidity

requirements, based on whether assets can be liquidated and
converted to cash on a same-day basis, including maximum
average maturity limits. Instruments that are eligible for
repurchase agreements with the Reserve Bank of Australia are
treated as liquid.

• Forward planning and forecasting of liquidity requirements.

The expected contractual cash flows of these investments, and other financial assets and liabilities,
are shown in the following table. The Group did not hold any derivative contracts in the current or
prior years. All available-for-sale financial assets are eligible for repurchase in the secondary market.

The values on the balance sheet may differ to the assets and liabilities in the previous tables due to
the difference in fair value at balance date compared to the contractual cash flows up to maturity.

ASX Annual Report 2015 | Risk management

30 June 2015

Assets
Cash and funds on deposit

Available-for-sale financial
assets

Receivables

Investments in listed entities

Total assets

Liabilities
Payables

Amounts owing to participants

Other liabilities

Total liabilities

Commitments
Capital and operating
commitments

Operating lease commitments

Total commitments

30 June 2014

Assets
Cash and funds on deposit

Available-for-sale financial
assets

Receivables

Investments in listed entities

Total assets

Liabilities
Payables

Amounts owing to participants

Other liabilities

Total liabilities

Commitments
Capital and operating
commitments

Operating lease commitments

Up to
1 month
$m

>1 month
to 3 months
$m

>3 months
to 1 year
$m

>1 year1
$m

No specific
maturity
$m

940.4

280.2

328.1

321.0

261.6

0.5

735.3

2,278.4

126.3

1,548.7

583.1

3,013.7

126.3

311.1

Total
$m

1,996.7

2,946.5

328.6

311.1

5,582.9

287.0

3,686.2

0.1

3,973.3

0.4

0.9

1.3

15.3

1.6

1.7

3.3

1.0

16.3

8.0

24.3

9.2

35.2

103.9

139.1

1,129.7

1,364.4

132.1

740.9

272.7

353.9

1,216.4

131.5

1.4

2,143.3

1,719.7

1,348.5

131.5

223.2

3,786.1

0.1

4,009.4

0.7

0.9

13.3

1.5

1.7

6.1

7.6

7.7

49.1

46.4

312.5

200.0

3,886.2

0.1

200.0

4,198.8

250.5

53.5

114.5

168.0

2,626.2

2,442.7

274.1

250.5

5,593.5

242.6

200.0

3,986.1

0.1

200.0

4,228.8

58.9

56.7

Total commitments
1 Available-for-sale financial assets include securities with contractual cash flows beyond one year, but are classified
as current assets on the balance sheet as they are expected to be held for less than 12 months. These comprise
Commonwealth Government securities lodged as collateral by clearing participants. Under normal circumstances the
Group does not receive coupon payments on these instruments.

95.5

15.3

3.2

1.6

115.6

(ii) Valuation techniques used to determine fair values

Investments in listed entities The fair value of the Group’s external listed equity investment is determined
by reference to the ASX-quoted closing price at reporting date.

Australian government bonds Fair values are determined by reference to published bond yields. As the fair
value of investments in listed entities and government bonds are based on quoted market prices in active
markets, these instruments fall within level 1 of the fair value hierarchy.

Available-for-sale financial assets (excluding Australian government bonds) Discounted cash flow analy-
sis is used as the primary valuation technique for fair value measurement of available-for-sale financial
assets. The fair value of bank bills, negotiable certificates of deposit and floating rate notes are determined
by reference to money market bid rates, while the fair value of bank-issued bonds is determined by refer-
ence to the respective quoted bond yields.

As the fair value of these instruments is determined using valuation techniques rather than quoted market
prices, they do not qualify for recognition in level 1 of the hierarchy. However, as the inputs (rates) used in
the discounted cash flow analysis are derived from quoted market prices, and are readily observable in
the market, these instruments will qualify for recognition within level 2 of the fair value hierarchy.

(iii) Fair values of other financial instruments

The Group has a number of financial instruments which are not measured at fair value on the balance
sheet. Due to their short-term nature, the carrying amounts of current receivables, current payables and
other liabilities are assumed to approximate their fair value. The carrying amount of non-current payables
approximates their fair value as the impact of discounting is not significant.

(e) Enforceable netting arrangements
There are no financial assets and financial liabilities recognised on a net basis. In the event that a clearing
participant defaults and ASX assumes open positions under novation, ASX’s policy is to recognise the
net open positions where it has the right to offset exposures.

In the event that a clearing participant defaults, ASX may utilise collateral lodged by that participant
to offset net losses realised from the close-out of positions. While ASX has the right to offset this
collateral from the open position, its policy is to only offset following the close-out. The aggregate
amount of collateral lodged by participants at 30 June 2015 was $3,886.2 million.

With respect to amounts owing to participants, the actual maturity cannot be determined as maturity
will depend on a number of factors including new contracts opened and contracts closed by partici-
pants. These have been classified as having maturities up to one month on the basis of the shortest
possible legal obligation for repayments.

(d) Fair value measurements

(i) Fair value hierarchy
The following tables present the Group’s financial assets measured and recognised at fair value at 30
June. The Group did not have any financial liabilities measured at fair value in either year.

30 June 2015

Assets
Investments in listed entities

Available-for-sale financial assets:

- Bank bills

- Negotiable certificates of deposit

- Floating rate notes

- Bonds

Total assets

30 June 2014

Assets
Investments in listed entities

Available-for-sale financial assets:

- Bank bills

- Negotiable certificates of deposit

- Floating rate notes

- Bonds

Total assets

Level 1
$m

311.1

91.1

402.2

Level 2
$m

34.9

1,417.7

1,161.0

184.9

2,798.5

250.5

170.0

420.5

58.9

1,169.9

965.6

43.4

2,237.8

Level 3
$m

Total
$m

311.1

34.9

1,417.7

1,161.0

276.0

3,200.7

250.5

58.9

1,169.9

965.6

213.4

2,658.3

The Group uses the following hierarchy to categorise its financial instruments measured and carried at fair
value:

• quoted prices (unadjusted) in active markets for identical assets and liabilities (level 1)

• inputs other than quoted prices included within level 1 that are observable for the asset or liability,

either directly (as prices) or indirectly (derived from prices) (level 2)

• inputs for the asset or liability that are not based on observable market data (unobservable inputs)

(level 3).

The Group’s policy is to recognise transfers into and out of fair value hierarchy levels as at the end of the
reporting date.

There were no transfers between levels for recurring measurements during the year. The Group did
not measure any assets or liabilities at fair value on a non-recurring basis as at 30 June 2015.

ASX Annual Report 2015 | Risk management

Investments

C1 Intangible assets - goodwill

Opening balance at 1 July
Movements during the year

2015
$m

2,317.6
-

2014
$m

2,317.6
-

Cash flows beyond the five-year period are
extrapolated using the estimated growth rates
stated below. The growth rate does not exceed
the long-term average growth rate for the busi-
ness in which the CGU operates.

Closing balance at 30 June

2,317.6

Goodwill on acquisition is initially measured at
cost, being the excess of the consideration paid
over the acquirer’s interest in the net fair value
of the identifiable assets, liabilities and contin-
gent liabilities of the acquiree. Following initial
recognition, goodwill is measured at cost less any
accumulated impairment losses.

(b) Key assumptions used for value-in-use
calculations
Management determined budgeted operating
results based on past performance and expec-
tations for the future. The growth rates used for
revenue and expense projections are consistent
with, or lower than, historical trends for the CGUs.

(a) Impairment test for goodwill
Management determined the Group to consist
of two cash generating units (CGUs), namely
exchange-traded and non exchange-traded. The
goodwill attributable to each CGU at the time of
acquisition is as follows:

• exchange-traded: $2,242.2 million

The pre-tax discount rate used is 9.5% (2014: 10.5%)
for all CGUs. The growth rate used to extrapolate
cash flow projections beyond five years is 3.5%
(2014: 3.5%) per annum for the exchange-traded
CGU and 3.5% (2014: 3.5%) per annum for the non
exchange-traded CGU. These calculations support
the carrying value of goodwill.

• non exchange-traded: $75.4 million.

C2 Investments

directors and does not have the power to participate
in financial and operating policy decisions.

There was no impairment in investments in listed
entities during the current or prior financial year.

Investments in listed entities are classified as
available-for-sale. After initial recognition, they
are measured at fair value, which is determined
by reference to quoted market prices at the close
of business on the balance sheet date.

C2.2 Equity accounted investments
On 28 November 2014, ASX acquired a 49%
interest in an associate entity, Yieldbroker Pty
Limited (Yieldbroker), for consideration of $65.3
million. Yieldbroker’s principal place of business is
Australia. It operates in licensed electronic markets
for trading Australian and New Zealand debt secu-
rities and interest rate derivatives.

The financial information below represents ASX’s 49%
share of Yieldbroker from the period of ownership:

No impairment charge arose in the current or prior
year.

Intangible assets that have an indefinite useful life,
such as goodwill, are not subject to amortisation
and are tested semi-annually for impairment, or
more frequently if events or changes in circum-
stances indicate that they might be impaired.
For the purpose of assessing impairment, assets
are grouped at the lowest levels for which there
are separately identifiable cash flows (CGUs) and
goodwill is allocated to each of the Group’s CGUs
that are expected to benefit from the business
combination in which the goodwill arose.

Where the recoverable amount is less than
the carrying amount, an impairment loss is
recognised as an expense in the statement of
comprehensive income.

The recoverable amount of each CGU is deter-
mined based on value-in-use calculations. These
calculations use cash flow projections based on
financial estimates reviewed by management
covering a five-year period.

ASX Annual Report 2015 | Investments

C2.1 Investments in listed entities
At 30 June 2015, the carrying amount of listed
shares at fair value using the closing market price
was $311.1 million (2014: $250.5 million).

Profit from continuing operations

Other comprehensive income

Total comprehensive income

2015
$m
0.3

0.3

2014
$m
-

ASX held 19.2% (2014: 19.2%) of the share capital
in IRESS Limited (IRESS), whose principal activities
consist of the provision of financial planning and
associated tools, in addition to an equity informa-
tion and trading platform for financial market and
wealth management participants.

During the current financial year, ASX purchased
share capital in IRESS for the consideration of $1.6
million. In the prior year, ASX participated in the enti-
tlement offer undertaken by IRESS Limited. The offer
resulted in an additional 5,500,007 shares being
issued to ASX for consideration of $39.3 million. In
addition to this, ASX purchased 331,350 shares on
market for the consideration of $2.9 million.

The Group does not have significant influence over the
investee as it has no representation on the Board of

At 30 June, the carrying value of the investment
in Yieldbroker was $65.7 million (2014: nil). There
was no impairment charge.

Equity accounted investments are initially recog-
nised at cost. The carrying amount is subse-
quently adjusted to recognise the Group’s share
of the post-acquisition profits or losses of the
investee in profit or loss, and the Group’s share
of movements in other comprehensive income
of the investee in other comprehensive income.
Dividends received or receivable from associates
are recognised as a reduction in the carrying
amount of the investment.

The carrying amount of equity accounted invest-
ments is tested for impairment whenever events
or changes in circumstances indicate that the
carrying amount may not be recoverable.

Other balance
sheet assets
and liabilities

D1 Receivables

Current
Trade receivables

Less: provision for impairment

Margins receivable

Accrued revenue

Interest receivable

Other debtors

Total

2015
$m

2014
$m

80.0

(1.6)

78.4
233.6

9.6

6.6

0.4

69.6

(1.5)

68.1
186.9

10.2

8.2

0.7

328.6

274.1

Trade receivables aged analysis
As at 30 June, the aged analysis for trade receiv-
ables of the Group was as follows:

Not past due

Past due 0-30 days

Past due 31-60 days

Past due 61-90 days

Past due 91 days and over

Total trade receivables not impaired
Trade receivables impaired

Total trade receivables

74.1

0.6

2.6

0.7

0.4

78.4
1.6

80.0

62.3

2.8

1.8

1.0

0.2

68.1
1.5

69.6

Trade receivables, which generally have terms of
30 days, are initially recognised at fair value and
subsequently measured at amortised cost, less
any provision for impairment.

The collectability of trade receivables is reviewed
on a regular basis. Debts known to be uncollect-
able are written-off by reducing the carrying
amount directly. A provision is raised when there
is objective evidence that the Group will not be
able to collect all of the original amounts due.
The amount of the provision is the difference
between the asset’s carrying amount and the
present value of the estimated future cash flows.
Impairment losses are recognised in the state-
ment of comprehensive income.

Margins receivable represents collateral receiv-
able from clearing participants on cash markets
and derivative positions held at the end of the
day, and are received on the next business day.
The amounts include the movement in the fair
value of derivative positions and are recognised
on trade date.

(a) Impaired trade receivables
As at 30 June 2015, the Group had provided for $1.6
million (2014: $1.5 million) of trade receivables that
were identified as being impaired. The individually
impaired receivables relate to companies that are in
administration, entities with prolonged suspension
from the ASX official list of listed companies, and
debts that remain unpaid for a prolonged period
despite active debt collection procedures.

Movements in the provision for
impairment of trade receivables

At 1 July
Provision for impairment
recognised during the year

Receivables written-off during
the year as uncollectable

Provisions subsequently reversed

At 30 June

2015
$m

(1.5)

2014
$m

(1.3)

(0.9)

(0.4)

0.3

0.5

(1.6)

0.1

(1.5)

The creation and release of the provision for
impairment of trade receivables has been
included in administration expenses in the
statement of comprehensive income. Amounts
provided for are written-off when there is no
expectation of recovering the balance.

(b) Past due but not impaired
As at 30 June 2015, $4.3 million (2014: $5.8
million) of trade receivables were past due but
not impaired. These balances relate to a number of
individual customers with whom the Group expects
to recover the debts.

The other classes within receivables do not include
any amounts that are past due but not impaired.
Based on the credit history of these classes, it
is expected that these amounts will be received
when due.

D2 Intangible assets – software

The movements in the intangible assets - software
balances are as follows:

Cost

2015
$m
251.9

2014
$m
217.7

Accumulated amortisation

(163.2)

(142.1)

Net book value at 1 July
Additions

Amortisation expense

Impairment and write-downs

Net book value at 30 June
Cost

88.7
30.5

(26.4)

(0.4)

92.4
282.4

75.6
34.8

(21.2)

(0.5)

88.7
251.9

Accumulated amortisation

(190.0)

(163.2)

Net book value at 30 June

92.4

88.7

All intangible assets – software are classified as
externally acquired.

The impairment charge recognised in the current
and prior financial year relates to certain intangible
assets that were identified as having no future
economic benefit to the Group. Impairment charges
were recognised within depreciation and amorti-
sation in the statement of comprehensive income.

Costs incurred in developing products or
systems, and acquiring software and licences
that will contribute to future benefits, are capi-
talised at cost and amortised on a straight-line
basis over their expected useful lives, from the
time the assets are in use. Certain staff costs are
capitalised when they can be specifically attrib-
uted to major software development projects.

Software purchased from external vendors is
classified as externally acquired and may include
capitalised staff costs that have been incurred in
the implementation of the software.

ASX Annual Report 2015 | Other balance sheet assets and liabilities

Software is subject to amortisation and is
reviewed for indicators of impairment at the
end of each reporting period or when events or
changes in circumstances have arisen that indi-
cate the carrying value may be impaired. Where
the recoverable amount is less than the carry-
ing amount, an impairment loss is recognised as
an expense in the statement of comprehensive
income. The recoverable amount is the higher of
an asset’s fair value less costs to sell and value-
in-use. Determining whether the intangibles are
impaired requires an estimation of their useful
lives, residual values and amortisation method.
The effect of any changes will be recognised on
a prospective basis.

Estimated useful lives of significant
computer software systems
Cash market and
derivative trading systems

Cash market clearing system

Derivative and OTC clearing systems

Debt depository system

5 years

10 years

D3 Property, plant and equipment

The movements in the property, plant and equipment asset balances are as follows:

Leasehold
improvements
$m

Plant and
equipment
$m

Computer
equipment
$m

30 June 2015
Cost

Accumulated depreciation

Net book value at 1 July 2014
Additions

Depreciation expense

Net book value at 30 June 2015
Cost

Accumulated depreciation

Net book value at 30 June 2015

30 June 2014
Cost

Accumulated depreciation

Net book value at 1 July 2013
Additions

Depreciation expense

Impairment and write-downs

Net book value at 30 June 2014

27.8

(14.1)

13.7
5.0

(2.7)

16.0
32.8

(16.8)

16.0

26.2

(11.6)

14.6
1.9

(2.5)

(0.3)

13.7

45.7

(27.9)

17.8
0.6

(2.7)

15.7
46.3

(30.6)

15.7

45.3

(25.1)

20.2
0.4

(2.8)

17.8

Total
$m

166.8

(114.2)

52.6
13.8

(11.6)

54.8
180.2

93.3

(72.2)

21.1
8.2

(6.2)

23.1
101.1

(78.0)

(125.4)

23.1

54.8

87.2

158.7

(65.9)

(102.6)

21.3
6.3

(6.5)

21.1

56.1
8.6

(11.8)

(0.3)

52.6

Property, plant and equipment is measured
at cost less accumulated depreciation and any
impairment in value. Cost includes expenditure
that is directly attributable to the acquisition
of the assets. Subsequent costs are included in
the asset’s carrying amount or recognised as a
separate asset, as appropriate, only when it is
probable that future economic benefits asso-
ciated with the item will flow to the Group and
the cost of the item can be measured reliably. All
other repairs and maintenance are recognised in
profit or loss during the financial period in which
they are incurred.

Assets’ residual values and useful lives are
reviewed, and adjusted if appropriate, at each
balance sheet date. An asset’s carrying amount
is written down immediately to its recoverable
amount if the asset’s carrying amount is greater
than its estimated recoverable amount.

Gains and losses on disposal are determined by
comparing the proceeds on disposal with the
carrying amount and are included in profit or
loss.

Depreciation of assets begins from the date of
acquisition or, in respect of internally developed
assets, from the time an asset is completed and
ready for use. Depreciation is provided on a
straight-line basis on all plant and equipment,
over their estimated useful lives.

The depreciation periods for each class of
asset, for the current and previous years, are as
follows:

Leasehold
improvements

The shorter of
minimum lease term
and useful life

Plant and equipment

3 – 10 years

Computer equipment 3 – 5 years

The cost of improvements to leasehold property
is capitalised and amortised over the unexpired
period of the lease or the estimated useful lives
of the improvements, whichever is the shorter.

ASX Annual Report 2015 | Other balance sheet assets and liabilities

D4 Payables

Trade creditors

Margins payable

Interest payable

Rebates payable

Transaction taxes payable

Employee-related payables

Expense accruals

Other payables

Total

2015
$m
0.7

233.6

6.3

19.4

6.5

18.9

20.5

6.6

2014
$m
1.1

186.9

6.2

12.4

5.2

17.3

11.6

1.9

312.5

242.6

The movement in the premises provision during
the year is set out below:

Opening balance at 1 July

Provisions used during the period

Provisions reversed during the
period

Additions during the period

Unwinding of discount

Closing balance at 30 June

2015
$m

11.6

(2.1)

(0.1)

0.3

0.1

9.8

2014
$m

11.9

(1.7)

1.3

0.1

11.6

Payables are initially recognised at fair value
and represent liabilities for goods and services
provided to the Group prior to the end of the
reporting period that are unpaid. The amounts,
stated at amortised cost using the effective
interest method, are unsecured and usually paid
within 30 days of recognition. Trade and other
payables are presented as current liabilities
unless payment is not due within 12 months of
the reporting date.

Interest payable includes interest owed to
participants on cash collateral lodged in addition
to interest owed on any borrowings. Interest is
recognised as a finance cost in the statement
of comprehensive income using the effective
interest rate method.

D5 Provisions

Current
Employee provisions

Premises provisions

Total

Non-current
Employee provisions

Premises provisions

Total

11.6

2.0

13.6

3.1

7.8

10.9

11.3

2.0

13.3

3.2

9.6

12.8

The provisions for employee benefits predom-
inantly relate to annual and long service leave
obligations. Premises provisions comprise lease
rental amortised on a straight-line basis over the
term of the lease, and provisions for make-good,
surplus lease space and lease incentives.

Provisions are recognised when the Group has
a present legal or constructive obligation as a
result of a past event, it is probable the obliga-
tion will be settled and the amount can be relia-
bly estimated. If the effect is material, provisions
are determined by discounting the expected
future cash flows at a pre-tax rate that reflects
current market assessments of the time value of
money and when appropriate, the risks specific
to the liability. The increase in the provision due
to the passage of time is recognised as a finance
cost in profit or loss.

Current employee provisions include liabilities for
annual leave and wages and salaries, including
non-monetary benefits that are expected to be
settled wholly within 12 months after the end of
the period in which the employees render the
related service. These are recognised in respect
of employees’ services up to the end of the
reporting period. Long service leave provisions
that the Company does not have an uncon-
ditional right to defer for 12 months after the
reporting date are recognised as a current provi-
sion, regardless of when the actual settlement is
expected to occur. Current employee provisions
are measured at the amounts expected to be
paid when the liabilities are settled.

Non-current employee provisions include long
service leave provisions where the Company
has an unconditional right to defer settlement
for at least 12 months after the reporting
period. Non-current employee provisions are
not expected to be wholly settled within 12
months after the end of the reporting date, and
are therefore measured as the present value of
expected future payments. When determining
whether employees qualify or are expected
to qualify for the Group’s long service leave
arrangements, consideration is given to history
of employee departures and periods of service.
Expected future wage and salary levels are
discounted using the rates attached to a basket
of comparable liquid corporate bonds at the end
of each reporting period, which most closely
match the terms to maturity of the related
liabilities.

Short-term incentive plans The Group recognises
a liability and an expense for short-term cash
incentives offered to staff. A provision is recog-
nised where there is a contractual obligation
or where there is past practice that gives clear
evidence of the amount of the obligation.

Where short-term incentives are deferred to
a future period the value of the incentives is
expensed over the term of the deferral and
recognised as a liability. Amounts expected to be
wholly settled within 12 months after the end of
the reporting date are recognised as current, all
others are recognised as non-current.

Termination benefits are payable when employ-
ment is terminated by the Group before the
normal retirement date, or when an employee
accepts voluntary redundancy in exchange for
these benefits.

The Group recognises termination benefits at
the earlier of when the offer of those benefits
can no longer be withdrawn or when costs for
a restructure are permitted to be provided for
within the scope of accounting standard guid-
ance. Benefits not expected to be settled wholly
within 12 months after the end of the period are
discounted to present value.

Surplus lease space provisions are recognised for
onerous contracts where premises are currently
leased under non-cancellable operating leases

and the Group either:

• does not occupy the premises and does not

expect to occupy it in the future

• sub-lets the premises for lower rentals than it
is presently obliged to pay under the original
lease, or

• occupies the premises, but does not expect
that the premises will provide any substan-
tive benefit beyond a known future date and
there is a committed plan to vacate.

Make-good obligations are provided for office
space under operating leases that require the
premises to be returned to the lessor in their
original condition. The operating lease payments
do not include the make-good payment at the
end of the lease term. Provisions for make-good
obligations are recognised when the Group
becomes party to operating lease contracts that
include make-good obligations.

Lease incentives received or receivable, such as
rent-free periods and premises fit-out allow-
ances, may be included in operating leases
entered into by the Group. The value of lease
incentives is included in the premises provision
and is recognised as a reduction in occupancy
expense in profit or loss on a straight-line basis
over the term of the lease. Where the original
lease term has been extended, these incentives
will continue to be recognised over the original
lease term.

ASX Annual Report 2015 | Other balance sheet assets and liabilities

Group
disclosures

E1 Subsidiaries

Parent entity1: ASX Limited

Subsidiaries of ASX Limited:
ASX Operations Pty Limited2
ASX Compliance Pty Limited
SFE Corporation Limited2
Australian Stock Exchange Pty Limited
ASX Futures Exchange Pty Limited
ASX Clearing Corporation Limited
ASX Long-Term Incentive Plan Trust
Australian Securities Exchange Limited2
ASX Settlement Corporation Limited2
ASX Energy Limited

Subsidiaries of ASX Settlement
Corporation Limited:
ASX Settlement Pty Limited
Austraclear Limited

Subsidiaries of Austraclear Limited:
Austraclear Services Limited

Subsidiaries of ASX Operations Pty Limited:
Sydney Futures Exchange Pty Limited
Options Clearing House Pty Limited
Australian Clearing House Pty Limited
Equityclear Pty Limited
Australian Clearing Corporation Limited2
New Zealand Futures and Options Exchange Limited
ASX Collateral Management Services Pty Limited

Subsidiaries of ASX Settlement Pty Limited:
CHESS Depositary Nominees Pty Limited

Subsidiaries of Australian
Securities Exchange Limited:
Australian Securities Exchange (US) Inc

Subsidiaries of ASX Clearing
Corporation Limited:
ASX Clear Pty Limited
ASX Clear (Futures) Pty Limited
ASX Clearing Corporation Trust

1. Parent entity refers to the immediate controlling entity
of the entity in which the investment is shown. The parent
entity’s investment in relation to all subsidiaries during the
financial year was 100% (2014: 100%).

2. These subsidiaries have been granted relief from the
necessity to prepare financial statements in accordance
with ASIC Class Order 98/1418. Refer note E2 for details of
the Deed of Cross Guarantee.

E2 Deed of Cross Guarantee

Pursuant to ASIC Class Order 98/1418 (as amended)
the wholly owned subsidiaries listed below are
relieved from the requirement to prepare a financial
report and directors’ report.

ASX Limited and Australian Securities Exchange
Limited are licensed to operate financial markets,
while ASX Clear and ASX Clear (Futures), Austraclear
Limited and ASX Settlement Pty Limited are licensed
to operate clearing and settlement facilities.

It is a condition of the Class Order that the Company
and each of the participating subsidiaries enter into
a Deed of Cross Guarantee (the Deed) under which
each company guarantees the debts of the others.

Although ASX is the sole member of the Securities
Exchanges Guarantee Corporation (SEGC), SEGC
has not been consolidated into the Group’s consol-
idated financial statements. SEGC is governed by
the Corporations Act 2001 and ASX is not able to
control the entity so as to pursue Group objectives
nor is it entitled to the entity’s assets.

All subsidiaries are incorporated in Australia except
for Australian Securities Exchange (US) Inc (incor-
porated in the US), and New Zealand Futures and
Options Exchange Limited and ASX Energy Limited
(incorporated in New Zealand). All subsidiaries have
the same reporting date.

Subsidiaries are consolidated from the date on
which control is transferred to the Group and
are de-consolidated from the date that control
ceases. Control exists when the Company is
exposed to, or has rights to, variable returns
from its involvement with that entity and has
the ability to affect those returns through its
power to direct the activities of the entity. In
addition to considering the existence of poten-
tial voting rights that are presently exercisable
or convertible, the Company also considers
relationships with other parties that may result
in the Company controlling an entity on the
basis of de facto circumstances.

Established trusts The Group has two established
trusts. LTIP administers the Group’s employee
share scheme while ASX Clearing Corporation
Trust manages the cash of the two central
counterparty clearing subsidiaries. Both trusts are
consolidated as the substance of the relationship
is that they are controlled by the Group.

The subsidiaries subject to the Deed at the end of
the reporting period are:
Subsidiary name
ASX Operations Pty Limited

ABN/ACN
42 004 523 782

SFE Corporation Limited

74 000 299 392

Australian Securities Exchange
Limited

Australian Clearing Corporation
Limited

ASX Settlement Corporation
Limited

83 000 943 377

068 624 813

48 008 617 187

The above entities represent a ‘Closed Group’ for
the purposes of the Class Order, and as there are
no other parties to the Deed that are controlled by
the Company, they also represent the ‘Extended
Closed Group’.

There were no entities added or removed from the
Deed during the year.

(a) Consolidated statement of comprehensive
income and summary of movements in retained
earnings

Set out below is a consolidated statement of
comprehensive income and summary of move-
ments in consolidated retained earnings for the
year ended 30 June 2015 and prior year, for the
Closed Group consisting of ASX Limited and the
above mentioned parties to the Deed.

ASX Annual Report 2015 | Group disclosures

2015
$m

757.5

214.2

2014
$m

720.4

196.0

543.3

524.4

(153.2)

390.1

(141.4)

383.0

41.4

0.8

15.8

(1.3)

42.2

14.5

432.3

397.5

480.0

427.1

(352.7)

390.1

(330.1)

383.0

517.4

480.0

Statement of comprehensive income
Total revenue

Total expenses

Profit before income tax
expense
Income tax expense

Net profit for the period

Items that may be
reclassified to profit or loss:
Change in the fair value of
investments

Change in the fair value of cash
flow hedges

Other comprehensive income
for the period, net of tax

Total comprehensive
income for the year

Summary of movements in
consolidated retained earnings

Retained earnings at the
beginning of the period
Dividends paid

Profit for the period

Retained earnings at
the end of the period

(b) Balance sheet

Set out adjacent is a consolidated balance sheet
for the year ended 30 June 2015 and prior year,
for the Closed Group consisting of ASX Limited
and the above mentioned parties to the Deed.

Current assets
Cash and funds on deposit

Available-for-sale financial assets

Receivables

Prepayments

2015
$m

2014
$m

134.6

125.6

59.6

9.4

242.8

66.7

56.0

9.7

Total current assets

329.2

375.2

Non-current assets
Investments in listed entities

Investments in subsidiaries

Equity accounted investments

Receivables

311.1

557.0

65.7

169.9

250.4

557.0

167.2

Intangible assets – goodwill

2,262.8 2,262.8

E3 Related party transactions

(a) Transactions between subsidiaries
ASX Operations Pty Limited provides operational
support for the majority of the Group’s transactions.

Expenses paid, revenues collected and purchase
of capital items on behalf of other entities within
the Group are booked into inter-entity accounts.
Interest is not charged on any inter-entity account.

Company

2014
Balances with entities within
$000
the wholly owned group
Net amounts receivable by the Company from wholly
owned subsidiaries at balance date is as follows:

2015
$000

Intangible assets – software

Property, plant and equipment

92.0

54.8

88.1

52.6

Current

Total non-current assets

3,513.3

3,378.1

Amounts due from subsidiaries

285,031 357,370

Total assets

3,842.5 3,753.3

Dividends

Current liabilities
Payables

Current tax liabilities

Provisions

Revenue received in advance

Other liabilities

Total current liabilities

Non-current liabilities
Deferred tax liabilities

Provisions

Revenue received in advance

Total non-current liabilities

Total liabilities

Net assets

Equity
Issued capital

Retained earnings

Asset revaluation reserve

Equity compensation reserve

Total equity

64.9

13.5

18.0

0.1

110.0

43.5

10.9

0.2

54.6

47.2

41.8

13.2

14.8

0.1

117.1

25.3

12.8

0.2

38.3

164.6

155.4

3,677.9 3,597.9

3,027.2 3,027.2

517.4

124.0

9.3

480.0

81.9

8.8

3,677.9 3,597.9

Dividends received or due and
receivable by the Company from
wholly owned subsidiaries

375,500 364,500

(b) Transactions with other related entities

The Company regularly enters into transactions
on an arm’s length basis and under normal
commercial terms and conditions with corpo-
rations that some of the directors are either
related to or employed by.

In accordance with the Corporations Act 2001,
the Group maintains two fidelity funds for claims
about the defalcation of monies in relation
to cash market and derivative trading. ASX
Limited acts as manager for the ASX Division 3
Compensation Fund and Australian Securities
Exchange Limited acts as trustee for the Sydney
Futures Exchange Limited Fidelity Fund. ASX
Division 3 Compensation Fund, Sydney Futures
Exchange Limited Fidelity Fund and SEGC are not
consolidated by ASX.

ASX Limited is the sole member of SEGC, which
is responsible for administering the National
Guarantee Fund (NGF), a compensation fund
available to meet certain types of claims arising
from dealings with participants of ASX and, in
limited circumstances, participants of ASX Clear.

Significant transactions
with related parties:
Contributions to superannuation
funds on behalf of employees

2015
$000

2014
$000

5,917

5,762

E4 Parent entity financial information

(a) Summary financial information
The individual financial statements for the parent
entity show the following aggregate amounts:

2015
$m

Statement of comprehensive income
Total revenue

396.0

2014
$m

375.5

(0.6)

374.9

(0.1)

395.9

(4.5)

391.4

41.4

15.8

432.8

390.7

304.4

3,385.8

3,690.2

13.6

50.7

64.3

360.0

3,259.4

3,619.4

41.9

32.2

74.1

3,625.9

3,545.3

3,027.2

467.8

123.4

7.5

429.1

82.0

7.0

3,625.9

3,545.3

Total expenses

Profit before income tax
expense
Income tax expense

Net profit for the period

Other comprehensive
income for the period, net
of tax

Total comprehensive income
for the period

Balance sheet
Current assets

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

Net assets

Issued capital

Retained earnings

Asset revaluation reserve

Equity compensation
reserve

Total equity

ASX Annual Report 2015 | Group disclosures

The financial information for the parent entity,
ASX, has been prepared on the same basis as the
consolidated financial statements, except as set
out below.

Unlisted shares in subsidiaries are accounted for
at cost in the financial statements of ASX.

Tax consolidation ASX elected to form a tax
consolidated group for income tax purposes.
ASX is the head entity and is therefore liable
for the income tax liabilities of the tax consol-
idated group. The consolidated current and
deferred tax amounts arising from temporary
differences of the members of the tax consol-
idated group are recognised in the separate
financial statements of the members of the
tax consolidated group using the ‘separate
taxpayer within group’ approach.

Tax funding agreement ASX has entered into
a tax funding agreement with members of
the Australian tax consolidation group. The
agreement has the objective of achieving an
appropriate allocation of the Group’s income
tax expense to the main operating subsidiaries
within the Group. The tax funding agreement
also has the objective of allocating deferred tax
assets relating to tax losses only, and current
tax liabilities of the main operating subsidiaries
to ASX. The subsidiaries will reimburse ASX for
their portion of the Group’s current tax liability
and will recognise this payment as an inter-en-
tity payable or receivable in their financial
statements for that financial year. ASX will
reimburse the subsidiaries for the deferred tax
asset from any unused tax losses or credits by
making a payment equal to the carrying value
of the deferred tax asset.

(b) Guarantees entered into by the parent entity
The parent entity, ASX, is party to a Deed of Cross
Guarantee together with the entities defined in
note E2. Under the Deed, the Company guarantees
to each creditor payment in full of any debt in the
event of winding up of any of the subsidiaries under
certain provisions of the Corporations Act 2001. No
deficiencies of assets exist in any of these entities.

ASX is also party to an agreement whereby it
undertakes, in certain circumstances, to replen-
ish any shortfall of share capital in ASX Clearing

Corporation Limited up to a maximum of $33.5
million. In addition, ASX also guarantees to make,
or procures ASX Clearing Corporation Limited to
make, such loan advances that may be required
to ensure that the combined outstanding principal
amount of the subordinated loans provided by ASX
Clearing Corporation Limited to ASX Clear and ASX
Clear (Futures) do not fall below $145.0 million.
Both of the above undertakings are subject to the
solvency of ASX Clear and ASX Clear (Futures), and
the occurrence of other limited and specific circum-
stances. There was no shortfall in either share capital
or subordinated loan balances as at 30 June 2015
or 30 June 2014. Further details in regards to the
subordinated loans are provided in note B1.

(c) Contractual commitments and contingencies
ASX has entered into an agreement with ASX Clear
for a $150 million standby loan facility that may be
used in limited and specific circumstances following
default of clearing participants.

ASX has entered into an agreement with CHESS
Depositary Nominees Pty Limited (CDN) which
provides $10 million (2014: $10 million) in funds to
support CDN’s licence obligations. No payments were
made under either facility in the current or prior year.

The National Guarantee Fund (NGF), which is
administered by SEGC, is maintained to provide
compensation for prescribed claims arising from
dealings with market participants as set out in the
Corporations Act 2001. If the net assets of the NGF
fall below the minimum amount determined by
the Minister, SEGC may determine that ASX must
pay a levy to SEGC. Where a levy becomes paya-
ble, ASX may determine that market participants
must pay a levy, provided that the total amounts
payable under this levy do not exceed the amount
payable by ASX to SEGC. No levies were called in
the current or prior year.

In accordance with the Australian Financial Services
Licence of ASX Collateral Management Services Pty
Limited, the Group has an obligation to fund any
amounts required to the subsidiary.

ASX Annual Report 2015 | Group disclosures

ASX Limited did not have any other contractual
commitments or contingent liabilities as at 30 June
2015 or 30 June 2014.

(d) Borrowings
The Group did not have any drawn borrowings
during the current or previous financial year. During
the year ASX Limited entered into a five-year
unsecured facility that can only be called upon to
provide short-term liquidity to ASX Clear following
a clearing participant default. The facility limit is
$100 million and remained undrawn at the date
of this report.

E5 Other disclosures

E5.1 Commitments
(a) Capital commitments
Capital commitments contracted for but not yet
incurred as at balance date are as follows:

Intangible assets - software

2015
$m
4.4

2014
$m
-

(b) Operating lease commitments
Commitments for minimum lease payments of
non-cancellable leases:
Due:
Not later than one year

10.6

10.3

Later than one year but not later
than five years

Later than five years

Total

38.6

65.3

114.5

29.7

16.7

56.7

The Group’s major leases are for the premises from
which it operates. These leases are all generally
long-term with unexpired periods up to 13 years,
with options to extend for further periods included
in certain lease agreements. Future rentals are
subject to indexation and periodical rent reviews.
The operating lease expense for the year
was $10.4 million (2014: $10.8 million).

Operating leases are those in which a significant
portion of the risks and rewards of ownership
are not transferred to the Group as lessee.
Payments made under operating leases are
recognised in profit or loss on a straight-line
basis over the period of the lease. Where oper-
ating leases have fixed increases, the payments
are recognised over the period of the lease on a
straight-line basis.

E5.2 Share-based payments
The Group provides performance rights to ordinary
shares of the Company to employees as part of the
LTI plan to recognise performance, skills and behav-
iours that deliver sustainable long-term share-
holder value. They entitle certain Key Management
Personnel (KMP) to performance rights over ASX
Limited shares.

Under the plans, participants are granted perfor-
mance rights that only vest if certain performance
conditions are met. All performance rights are to
be settled by physical delivery of ordinary shares in
ASX Limited subject to the performance conditions
being attained.

The number of rights that vest depends on an
EPS hurdle being achieved and ASX’s total share-
holder return (TSR) relative to a comparator
group comprising the S&P/ASX 100 constituents
(excluding resource companies and property trusts)
established at the beginning of the performance
period, as well as selected overseas exchanges.
The plans do not carry rights to dividends. The
terms and conditions of these grants are shown
in the following table.

Grants outstanding at the end of the reporting period:

Grant date/employees
entitled
Performance rights
granted to certain KMP on
23 September 2014

Performance rights
granted to certain KMP on
25 September 2013

Performance rights
granted to certain KMP on
5 October 2012

Total

Number of
instruments
granted

54,864

60,216

71,360

186,440

Vesting conditions

3 years service; 30% of performance
rights require relative TSR and 70% of
performance rights require growth in EPS

No grants vested during the current reporting period.

Contractual
life of the
award

Weighted
average
fair value

3 years

$27.34

E5.4 Auditor’s remuneration
The following fees were paid or payable by the Group for and on behalf of all Group entities for services
provided by the auditor and its related practices during the financial years ended 30 June 2015 and 2014:
2014
$

PricewaterhouseCoopers Australia

2015
$

Statutory audit services:
Audit and review of the financial statements and other
audit work under the Corporations Act 2001

3 years

$24.91

Audit of information technology platforms

3 years

$21.02

Other audit services:
Audit of technology applications

Model validation

Code of Practice compliance

Non-audit services:
Tax compliance services

Other non-audit services

Total remuneration for PricewaterhouseCoopers Australia

595,560

159,700

182,800

41,000

58,395

1,037,455

566,400

155,000

61,811

51,000

72,032

50,000

956,243

Employee expenses
Amounts recognised in profit or loss based on the amortisation of the grant date fair value of perfor-
mance rights, including the impact of reversals resultant from non-market based performance hurdles
not being achieved, for the financial year ended 30 June 2015 totalled $0.5 million (2014: $0.5 million).

The fair value of the performance rights for the EPS awards is calculated using the share price at market
close on the grant date, less the present value of the expected dividends over the three-year performance
period. The fair value of performance rights for the TSR awards is calculated by an independent valuer
using a Black-Scholes option valuation model and Monte Carlo simulation at grant date.

Fair values are recognised over the vesting period as an expense with a corresponding increase in the
equity compensation reserve. Fair values include the impact of any market performance conditions and
the impact of any non-vesting conditions, but excludes the impact of any service and non-market perfor-
mance vesting conditions. Non-market vesting conditions are included in assumptions about the number
of performance rights that are expected to vest. The impact of any revisions to the original estimates are
recognised in profit or loss with a corresponding adjustment to equity.

E5.3 Key Management Personnel remuneration
KMP compensation (including non-executive directors) provided during the financial years ended 30
June 2015 and 2014 is as follows:

Short-term employee benefits

Post-employment benefits

Long-term benefits

Share-based payments

Total

2015
$000
10,614

312

1,695

522

13,143

2014
$000
10,016

279

1,410

526

12,231

Further details of KMP remuneration are disclosed in the remuneration report on pages 26 to 35.

In the prior financial year, PricewaterhouseCoopers provided other non-audit services for the review
of derivative pricing systems used for risk management.

In addition to the above, total audit fees of $28,200 (2014: $27,500) and tax compliance fees of $18,105
(2014: $18,105) were received by the auditor in relation to SEGC, NGF, ASX Division 3 Compensation Fund
and the Sydney Futures Exchange Limited Fidelity Fund, which are not consolidated as part of the Group.

E5.5 Other accounting policies
(a) New and amended standards and interpretations adopted by the Group
The new standards and amendments to standards that are mandatory for the first time in the annual
reporting period commenced on 1 July 2014 do not affect any amounts recognised in the current or
prior periods, and are not likely to materially affect amounts in future periods. The Group has not
elected to apply any pronouncements before their operative date in the annual reporting period
ended 30 June 2015.

(b) New and amended standards and interpretations not yet adopted by the Group
The following new or amended accounting standards and interpretations issued by the AASB have been
identified as those which may have a material impact on the Group in the period of initial application.
Whilst published, these standards and interpretations were not mandatory for the annual reporting
period ended 30 June 2015, and have not been early adopted by the Group. The Group’s assessment
of the impact of these standards and interpretations is set out in the table on the following page:

ASX Annual Report 2015 | Group disclosures

Reference
AASB 9 Financial Instruments

AASB 2010-7 Amendments to
Australian Accounting Standards aris-
ing from AASB 9 (December 2010)

AASB 2013-9 Amendments to
Australian Accounting Standards –
Conceptual Framework, Materiality
and Financial Instruments Part C:
Financial Instruments

AASB 2014-1 Amendments to
Australian Accounting Standards –
Part E: Financial Instruments

AASB 2014-7 Amendments to
Australian Accounting Standards aris-
ing from AASB 9 (December 2014)

AASB 2014-8 Amendments to
Australian Accounting Standards
arising from AASB 9 (December 2014)
- Application of AASB 9 (December
2009) & AASB 9 (December 2010)
AASB 15 Revenue from Contracts with
Customers

AASB 2014–5 Amendments to
Australian Accounting Standards
arising from AASB 15

AASB 2014-10 Amendments to
Australian Accounting Standards
- Sale or contribution of assets
between an investor and its associate
or joint venture

Anticipated
date of
application
1 January
2018

E5.6 Subsequent events
From the end of the reporting period to the date of this report, no matter or circumstance has arisen
which has significantly affected the operations of the Group, the results of those operations or the
state of affairs of the Group.

Description
The new standard includes revised guidance on the
classification and measurement of financial assets,
and supplements the new general hedge accounting
requirements previously published.

Under the new standard an entity must classify its
financial assets as amortised cost, fair value through
other comprehensive income or fair value through
profit or loss on the basis of both the entity’s business
model for managing financial assets and the contrac-
tual cash flow characteristics of the financial asset.

The standard also introduces a new expected credit
loss model for calculating impairment.

The Group’s assessment of the potential accounting,
disclosure and financial impact on adoption of AASB 9
will continue up to the date of application.

1 January
2017

1 January
2016

The standard replaces AASB 111 Construction
Contracts, AASB 118 Revenue, AASB Interpretation
13 Customer Loyalty Programs, AASB 15 Agreements
for Construction of Real Estate, AASB Interpretation
18 Transfer of Assets from Customers and AASB
Interpretation 131 Revenue - Barter Transactions
Involving Advertising Services.

The new standard is based on the principle that reve-
nue is recognised when control of a good or service
transfers to the customer. The standard contains a
single model that applies to contracts with customers,
and two approaches to recognising revenue: at a point
in time or over time.

The Group’s assessment of the potential accounting,
disclosure and financial impact on adoption of AASB 15
will continue up to the date of application.

The amendment clarifies the accounting treatment for
the sale or contribution of assets between an investor
and its associates. A full gain or loss shall be recognised
if the transaction involves a business, while a partial
gain or loss shall be recognised if the transaction
involves assets that do not constitute a business.

There have been no sales or contributions of assets
between the Group and its associate and as such the
amendment is not expected to have any impact on the
Group.

There are no other standards that are not yet effective and that are expected to have a material impact
on the Group in the current or future reporting periods and on foreseeable future transactions.

ASX Annual Report 2015 | Group disclosures

Directors’
declaration

In the opinion of the directors of ASX Limited (the
Company):

Signed in accordance with a resolution of the
directors:

Rick Holliday-Smith
Chairman

Elmer Funke Kupper
Managing Director and Chief Executive Officer

Sydney, 20 August 2015

a. the financial statements and notes that are
contained in pages 39 to 62 and the remu-
neration report set out on pages 26 to 35 in
the Annual Report, are in accordance with the
Corporations Act 2001, including:

i. giving a true and fair view of the consol-
idated entity’s financial position as at 30
June 2015 and of its performance for the
financial year ended on that date, and

ii. complying with Australian Accounting

Standards, the Corporations Regulations
2001 and other mandatory professional
reporting requirements

b. there are reasonable grounds to believe that
the Company will be able to pay its debts as
and when they become due and payable

c. at the date of this declaration, there are
reasonable grounds to believe that the
members of the Extended Closed Group
identified in note E2 will be able to meet any
obligations or liabilities to which they are, or
may become, subject by virtue of the Deed of
Cross Guarantee described in note E2, and

d. the financial statements also comply with

International Financial Reporting Standards.

The directors have been given the declarations
required by section 295A of the Corporations Act
2001 from the Chief Executive Officer and Chief
Financial Officer for the financial year ended 30
June 2015.

ASX Annual Report 2015 | Directors’ declaration

Independent
auditor’s
report to the
members of
ASX Limited

PricewaterhouseCoopers, ABN 52 780 433 757
Darling Park Tower 2, 201 Sussex Street,

GPO BOX 2650, SYDNEY NSW 1171

T: +61 2 8266 0000

F: +61 2 8266 9999

www.pwc.com.au

Liability limited by a scheme approved under

Professional Standards Legislation.

effect of misstatements, both individually and in
aggregate on the financial report as a whole.

Overall Group
materiality

How we deter-
mined it

Rationale for
the materiality
benchmark
applied

$28 million (2014: $27 million)

5% of profit before tax

We chose profit before tax as the
benchmark because, in our view,
it is the benchmark against which
the performance of the Group is
most commonly measured, and is a
generally accepted benchmark. We
chose 5% which is within the range
of acceptable quantitative material-
ity thresholds in auditing standards.

Key audit matters
Key audit matters are those matters that, in our
professional judgement, were of most signifi-
cance in our audit of the financial report for the
current period. We have communicated the key
audit matters to the Audit and Risk Committee,
but they are not a comprehensive reflection of
all matters that were identified by our audit and
that were discussed with the committee. On the
following page we have described the key audit
matters we identified and have included a summary
of the audit procedures we performed to address
those matters.

The key audit matters were addressed in the
context of our audit of the financial report as a
whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.

Report on the audit of the financial report

Opinion
We have audited the financial report of ASX
Limited (the Company), including its subsidiaries
(the Group), which comprises the consolidated
balance sheet as at 30 June 2015, the consoli-
dated statement of comprehensive income, the
consolidated statement of changes in equity and
the consolidated statement of cash flows for the
year then ended, notes comprising a summary of
significant accounting policies and other explan-
atory information, and the directors’ declaration
of the Company.

In our opinion:

a. the accompanying financial report of

the Company is in accordance with the
Corporations Act 2001, including:

i. giving a true and fair view of the Group’s
consolidated financial position as at 30
June 2015 and of its consolidated financial
performance for the year ended on that
date; and

ii. complying with Australian Accounting

Standards and the Corporations
Regulations 2001.

b. the financial report also complies with

International Financial Reporting Standards
as disclosed in the preface to the notes to the
financial statements.

Basis for opinion
We conducted our audit in accordance with
Australian Auditing Standards. Our responsibili-
ties under those standards are further described
in the Auditor’s responsibilities for the audit of
the financial report section of our report. We are
independent of the Group in accordance with the
Corporations Act 2001 and the ethical require-
ments of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are rele-
vant to our audit of the financial report in Australia.
We have also fulfilled our other ethical responsi-
bilities in accordance with the Code.

We confirm that the independence declaration
required by the Corporations Act 2001, which has
been given to the directors of the Company, would
be in the same terms if given to the directors as at
the time of this auditor’s report.

We believe that the audit evidence we have
obtained is sufficient and appropriate to provide
a basis for our opinion.

Audit scope
We designed our audit by determining materiality
and assessing the risks of material misstatement
in the financial report. In particular, we considered
where the directors made subjective judgements;
for example in respect of significant accounting
estimates that involved making assumptions and
considering future events that are inherently uncer-
tain. As in all of our audits, we also addressed the
risk of management override of internal controls,
including whether there was evidence of bias that
represented a risk of material misstatement due
to fraud.

We tailored the scope of our audit in order to
perform sufficient work to enable us to provide
an opinion on the financial report as a whole,
taking into account the structure of the Group,
the accounting processes and controls, and the
industry in which the Group operates.

Materiality
The scope of our audit was influenced by our
application of materiality. Our audit opinion aims
to provide reasonable assurance that the finan-
cial report is free from material misstatement.
Misstatements may arise due to fraud or error.
They are considered material if individually or in
aggregate, they could reasonably be expected to
influence the economic decisions of users taken on
the basis of the financial report.

We determined certain quantitative thresholds for
materiality, including the overall Group materiality
set out in the table below. These, together with
qualitative considerations, helped us to determine
the scope of our audit and the nature, timing and
extent of our audit procedures and to evaluate the

ASX Annual Report 2015 | Independent auditor’s report to the members of ASX Limited

Key audit matter

Valuation and existence of
available-for-sale financial assets
We focused on this area due to the size of the balance
and the inherent judgement involved in determining
the fair value of financial instruments.

How our audit addressed the matter
Our audit procedures included the following:

We agreed available-for-sale security balances held
at 30 June 2015 to Austraclear holdings statements.
Austraclear provides depository, registration, cash
transfer and settlement services for debt instrument
securities in financial markets in Australia.

As at 30 June 2015 the available-for-sale assets were
valued at $2,889.6m (2014: $2,407.8m).

As Austraclear is owned and operated by the Company,
our work included testing the:

Of these assets, $91.1m were classified as “level 1”
financial instruments in accordance with the classifi-
cation under Australian Accounting Standards where
quoted prices in active markets are available for
identical assets.

The remaining $2,798.5m were classified as “level 2”
financial instruments in accordance with the classifi-
cation under Australian Accounting Standards where
values are derived from observable prices (or inputs to
valuation models) other than quoted prices included
within level 1.

The valuation of the level 2 securities therefore
requires a higher degree of judgement.

Refer to page 49 note B2 (b) for details of the
assets and page 53 note B3 (d) for the level 1 or 2
classification.

1. controls used to manage and control the Information
Technology activities and computer environment,
covering the overall IT computer environment,
program development, program changes, access
to programs and data and computer operations in
place at Austraclear;

2. operation of the Austraclear control that matches

trade details between counterparties, by inputting a
range of test trades, with both correct and incorrect
details, to ensure that only appropriate trades were
processed by the system; and

3. generation of the Austraclear holdings reports by
running test reports and comparing the output to
the observed data in the system.

We found these controls to be appropriately designed
and operating effectively and the relevant reports
generated from Austraclear could be relied upon for
the purposes of our audit.

To test valuation we first understood and evaluated the
controls in place over the valuation of available-for-sale
securities.

For both level 1 and level 2 securities we then used
independent sources of information to determine an
acceptable range of valuations for 100% of the secu-
rities held at 30 June 2015, and compared this to the
valuations recorded on the balance sheet.

We found that all securities tested were carried at
values within the range of acceptable valuations that
we independently calculated.

Key audit matter

Goodwill impairment assessment
The Group’s goodwill is recognised in two Cash
Generating Units (CGUs): “exchange-traded”
($2,242.2m) and “non exchange-traded” ($75.4m).

We focused on this area due to the size of the good-
will balance ($2,317.6 million as at 30 June 2015), and
because the directors’ assessment of the ‘value in use’
of the Group’s CGUs involves judgements about the
future results of the business and the discount rates
applied to future cash flow forecasts.

For the year ended 30 June 2015 management have
performed an impairment assessment over the good-
will balance by:

1. calculating the value in use for each CGU using a

discounted cash flow model. These models used cash
flows (revenues, expenses and capital expenditure)
for each CGU for 5 years, with a terminal growth rate
applied to the 5th year. These cash flows were then
discounted to net present value using the Company’s
weighted average cost of capital (WACC); and

2. comparing the resulting value in use of each CGU to

their respective book values.

Management also performed a sensitivity analysis over
the value in use calculations, by varying the assump-
tions used (growth rates, terminal growth rate and
WACC) to assess the impact on the valuations.

As a final check, management compared the book
values of each CGU to the ASX Limited market capi-
talisation and to major analyst valuations for the
Company.

How our audit addressed the matter
While only 3% of the Goodwill relates to the non
exchange-traded CGU, the balance is still well above
our materiality threshold and so we perform detailed
procedures over both CGUs which included the
following:

We evaluated management’s cashflow forecasts and
the process by which they were developed, including
verifying the mathematical accuracy of the underlying
calculations. We also compared them to the latest
Board approved budgets. We found that the budgets
used in the value in use calculations were consist-
ent with the Board approved budgets, and that the
key assumptions were subject to oversight by the
Directors. We noted that the Board approved budgets
cover a period of 3 years, but that forecasts for the
purposes of the value in use calculation extend out to 5
years. We therefore made years 4-5 a particular focus
area for the procedures below.

We compared current year (2015) actual results with
the figures included in the prior year (2014) forecast to
consider whether any forecasts included assumptions
that, with hindsight, had been optimistic. We found
that actual performance was materially consistent with
forecast performance.

We also challenged:

1. management’s key assumptions for long-term

growth rates in the forecasts by comparing them
to historical results and economic and industry
forecasts; and

2. the discount rate used in the model by assessing

the cost of capital for the Group by comparing it to
market data and industry research.

Refer to page 40 (Consolidated balance sheet), and
page 54 note C1 for details of management’s impair-
ment test and assumptions.

We found that the growth rate assumptions were
consistent with historic results adjusted for the
economic outlook and industry forecasts.

We found that the discount rate used by management
of 9.5% pre-tax was consistent with market data and
industry research.

We then stress-tested the assumptions used by analys-
ing the impact on results from using other growth rates
and discount rates which were within a reasonably
foreseeable range.

We found that significant headroom remained between
the stress-tested value in use calculations and the
carrying value of the CGUs in the financial statements.
In particular, we noted that significant headroom
remained even when a zero terminal growth rate was
assumed in conjunction with no revenue growth for the
first 5 years.

As a final test we also compared the Group’s net assets
as at 30 June 2015 of $3.8 billion to its market capitali-
sation of $7.8 billion and noted the $4 billion of implied
headroom was consistent with the results of our testing.

ASX Annual Report 2015 | Independent auditor’s report to the members of ASX Limited

Directors’ responsibilities
for the financial report
The directors of the Company are responsible for
the preparation of the financial report that gives
a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act
2001 and for such internal control as the directors
determine is necessary to enable the preparation of
the financial report that gives a true and fair view
and is free from material misstatement, whether
due to fraud or error.

In preparing the financial report, the directors are
responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as appli-
cable, matters related to going concern and using
the going concern basis of accounting unless the
directors either intend to liquidate the Group or to
cease operations, or have no realistic alternative
but to do so.

Other information
The directors are responsible for the other infor-
mation. The other information comprises the infor-
mation in the Company’s annual report for the
year ended 30 June 2015, but does not include the
financial report and the auditor’s report thereon.

Our opinion on the financial report does not cover
the other information and we do not express any
form of assurance conclusion thereon.

In connection with our audit of the financial report,
our responsibility is to read the other information
and, in doing so, consider whether the other infor-
mation is materially inconsistent with the financial
report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we
conclude that there is a material misstatement of
this other information we are required to report
that fact. We have nothing to report in this regard.

Auditor’s responsibilities
for the audit of the financial report
Our objectives are to obtain reasonable assurance
about whether the financial report as a whole is
free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guaran-
tee that an audit conducted in accordance with
the Australian Auditing Standards will always
detect a material misstatement when it exists.
Misstatements can arise from fraud or error and
are considered material if, individually or in the
aggregate, they could reasonably be expected to
influence the economic decisions of users taken on
the basis of the financial report.

As part of an audit in accordance with the
Australian Auditing Standards, we exercise profes-
sional judgement and maintain professional scep-
ticism throughout the audit. We obtain sufficient
appropriate audit evidence regarding the financial
information of the entities or business activities
within the Group to express an opinion on the
consolidated financial statements. We are responsi-
ble for the direction, supervision and performance
of the Group audit. We remain solely responsible
for our audit opinion.

In obtaining sufficient appropriate audit evidence,
we:

• identify and assess the risks of material

misstatement of the financial report, whether
due to fraud or error, design and perform
audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion.
The risk of not detecting a material misstate-
ment resulting from fraud is higher than for
one resulting from error, as fraud may involve
collusion, forgery, intentional omissions,
misrepresentations, or the override of internal
control;

an opinion on the effectiveness of the Group’s
internal control;

• evaluate the appropriateness of account-

ing policies used and the reasonableness of
accounting estimates and related disclosures
made by the directors;

• conclude on the appropriateness of the

directors’ use of the going concern basis of
accounting and, based on the audit evidence
obtained, whether a material uncertainty
exists related to events or conditions that may
cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude
that a material uncertainty exists, we are
required to draw attention in our auditor’s
report to the related disclosures in the financial
report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date
of our auditor’s report. However, future events
or conditions may cause the Group to cease to
continue as a going concern; and

• evaluate the overall presentation, structure
and content of the financial report, including
the disclosures, and whether the financial
report represents the underlying transactions
and events in a manner that achieves fair
presentation.

We communicate with the directors regarding,
among other matters, the planned scope and timing
of the audit and significant audit findings, including
any significant deficiencies in internal control that
we identify during our audit.

We also provide the directors with a statement that
we have complied with relevant ethical require-
ments regarding independence, and communi-
cate with them all relationships and other matters
that may reasonably be thought to bear on our
independence, and where applicable, related
safeguards.

• obtain an understanding of internal control
relevant to the audit in order to design audit
procedures that are appropriate in the circum-
stances, but not for the purpose of expressing

From the matters communicated with the directors,
we determine those matters that were of most
significance in the audit of the financial report
for the current period and are therefore the key

ASX Annual Report 2015 | Independent auditor’s report to the members of ASX Limited

audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in
extremely rare circumstances, we determine that
a matter should not be communicated in our report
because the adverse consequences of doing so
would reasonably be expected to outweigh the
public interest benefits of such communication.

Report on the remuneration report

Opinion on the remuneration report
We have audited the remuneration report included
in pages 26 to 35 of the directors’ report for the
year ended 30 June 2015. In our opinion, the remu-
neration report of ASX Limited, for the year ended
30 June 2015 complies with section 300A of the
Corporations Act 2001.

Responsibilities for the remuneration report
The directors of the Company are responsible for
the preparation and presentation of the remuner-
ation report in accordance with section 300A of
the Corporations Act 2001. Our responsibility is
to express an opinion on the remuneration report,
based on our audit conducted in accordance with
Australian Auditing Standards.

PricewaterhouseCoopers

Matthew Lunn
Partner

Sydney, 20 August 2015

Key financial
ratios

Year ended 30 June 2015
Basic earnings per share (EPS)

Diluted EPS

Underlying EPS

Dividend per share – interim

Dividend per share – final

Statutory return on equity

Underlying return on equity

EBITDA/operating revenue

EBIT/operating revenue

Total expenses (including depreciation and amortisation)/operating revenue

Capital expenditure ($’000)

Net tangible asset backing per share

Net asset backing per share

Shareholders’ equity as a % of total assets (excluding participants’ balances)

Shareholders’ equity as a % of total assets (including participants’ balances)

Share price at end of period

Ordinary shares on issue at end of period

Weighted average number of ordinary shares

Market value of ordinary shares on issue ($m)

Market to book ratio

Full-time equivalent permanent staff:
- number at period end

- average during the period

Notes
1,2

1,2

2,3

6,7

FY11
198.4c

198.4c

200.8c

90.2c

93.0c

12.0%

12.1%

78.1%

74.3%

25.7%

FY12
190.6c

190.6c

194.6c

92.8c

85.1c

11.5%

11.7%

76.9%

72.4%

27.6%

FY13
195.5c

195.5c

87.9c

82.3c

11.5%

76.3%

71.4%

28.6%

FY14
198.5c

198.5c

88.2c

89.9c

10.6%

76.7%

71.5%

28.5%

FY15
205.7c

205.7c

208.4c

92.3c

95.1c

10.8%

10.9%

77.1%

71.6%

28.4%

$50,230

$39,074

$38,881

$43,235

$44,404

$4.01

$17.25

82.4%

48.9%

$29.98

$3.85

$17.10

83.5%

45.9%

$29.36

$5.04

$18.05

91.9%

45.1%

$33.07

$6.53

$18.96

91.3%

45.8%

$35.64

$6.97

$19.42

90.1%

46.7%

$39.90

175,136,729

184,066,764

193,595,162

177,534,497

177,916,677

178,068,323

193,022,315

193,413,893

$5,333

1.77

502

505

$5,223

1.74

505

502

$6,087

1.83

$6,900

1.88

529

515

526

534

$7,724

2.05

515

524

Notes
1. Based on statutory net profit after tax (NPAT) including significant items and weighted average number of shares.
2. Financial years 2011 to 2012 have been restated for the bonus element of the rights issue in financial year 2013.
3. Based on underlying NPAT excluding significant items and weighted average number of shares.
4. Based on statutory NPAT including significant items.
5. Based on underlying NPAT excluding significant items.
6. Operating revenue excludes interest and dividend revenue (underlying).
7. EBITDA – earnings before interest, tax, depreciation and amortisation; EBIT – earnings before interest and tax.

These metrics along with total expenses exclude significant items.

8. The share price for financial years 2011 to 2012 has been restated for the impact of the capital raising in financial year 2013.

ASX Annual Report 2015 | Key financial ratios

Transaction
levels and
statistics

Year ended 30 June 2015

Listings and issuer services

Total domestic market capitalisation ($bn)

Total number of listed entities (includes all stapled entities)

Number of new listings

Average annual listing fee

Average initial listing fee

Average fee per $m of secondary capital

Initial capital raised ($m)

Secondary capital raised ($m)

Other secondary capital raised including scrip-for-scrip ($m)

Total capital raised (including other) ($m)

Number of new warrant series quoted

Total warrant series quoted

Number of CHESS holding statements issued (m)

Cash market
Trading days

Total cash market trades (‘000)

Average daily cash market trades

Open trading ($bn)

Auctions trading ($bn)

Centre Point ($bn)

Trade reporting ($bn)

Total cash market value ($bn)
Average daily on-market value ($bn)

Average daily value (including trade reporting) ($bn)

Average trade size

Total billable value ($bn)

Average cash market trading, clearing and settlement fee per trade

Average fee per $1,000 of value traded (cents)

Average fee per dollar of value (bps)

Velocity (total value/average market capitalisation)1
Number of dominant settlement messages (m)
1 Total value transacted on all venues.

FY11

FY12

FY13

FY14

FY15

$1,349

2,247

160

$26,086

$81,865

$759

$29,387

$33,745

$24,947

$88,079

2,822

2,409

14.1

253

144,321

570,440

$803.513

$156.315

$4.700

$374.612

$1,339.140
$3.812

$5.293

$9,279

$1,186

2,211

$27,388

$63,160

$851

$10,187

$32,558

$7,850

$50,595

7,113

4,743

11.1

253

165,806

655,359

$717.882

$147.213

$19.789

$300.443

$1,185.327
$3.498

$4.685

$7,149

$1,347

2,185

$27,463

$87,139

$1,026

$9,908

$32,448

$4,027

$46,383

6,690

5,140

11.1

252

174,750

693,454

$645.161

$147.418

$36.953

$216.420

$1,552

2,192

107

$28,333

$166,786

$1,002

$27,659

$33,378

$4,985

$66,022

4,206

3,564

11.8

253

181,861

718,817

$612.491

$157.338

$61.135

$177.933

$1,045.952
$3.292

$1,008.897
$3.284

$4.151

$5,985

$3.988

$5,548

$1,612

2,220

120

$31,859

$174,080

$854

$38,916

$38,787

$11,170

$88,873

2,903

3,050

13.1

254

190,647

750,578

$698.315

$193.292

$74.933

$145.909

$1,112.449
$3.805

$4.380

$5,835

$1,300.726

$1,161.573

$1,024.227

$989.760

$1,092.799

$0.93

10.0

1.00

97%

16.8

$0.75

$0.66

$0.64

$0.66

10.5

1.05

97%

16.1

11.0

1.10

86%

15.4

11.6

1.16

78%

15.2

11.3

1.13

82%

15.7

ASX Annual Report 2015 | Transaction levels and statistics

Year ended 30 June 2015

Equity options
Trading days (exchange-traded options)

Equity derivatives (excluding ASX SPI 200)
Equity options1
Index options and futures
Grains futures and options on futures2
Total contracts (‘000)1

Average daily derivatives contracts1
Average fee per derivatives contract1

Futures
Trading days (futures and options)

Total contracts – futures (‘000)
ASX SPI 200

90 day bank bills

3 year bonds

10 year bonds

30 day interbank cash rate

Agricultural

Electricity
Other3
NZ$ 90 day bank bills

Total futures

Total contracts – options on futures (‘000)
ASX SPI 200

90 day bank bills

3 year bonds

Overnight 3 year bonds

Intra-day 3 year bonds
Other3

Total options on futures

Total futures and options on futures contract volume (‘000)

Daily average contracts – futures and options

Average fee per contract – futures and options

1 FY11 restated on the current contract size. Size of contracts reduced in May 2011.
2 Grain contracts were transferred to the futures market in October 2011.
3 Other includes VIX and sector futures.

FY11

253

153,553

7,016

483

161,052

636,570

$0.19

FY12

253

151,619

12,125

154

163,898

647,819

$0.17

FY13

252

145,531

11,762

N/A

157,293

624,179

$0.18

FY14

253

116,343

8,249

N/A

124,592

492,460

$0.18

FY15

254

109,546

10,958

N/A

120,504

474,426

$0.20

256

255

256

10,506

20,729

38,832

15,230

6,195

210

1,694

93,404

379

562

2,039

1,504

4,564

97,968

382,688

$1.45

11,811

21,652

42,503

17,220

5,334

288

183

1,597

10,259

25,866

47,499

21,211

4,780

354

168

1,176

9,715

25,903

47,886

25,520

3,517

181

165

1,157

100,593

111,332

114,064

477

347

1,029

978

2,886

103,479

404,215

$1.56

349

526

1,914

1,443

4,276

115,608

453,365

$1.46

473

416

1,523

1,527

3,990

118,054

461,148

$1.57

10,301

28,706

49,717

29,498

3,678

135

224

107

1,394

123,760

454

245

896

927

2,581

126,341

493,520

$1.44

ASX Annual Report 2015 | Transaction levels and statistics

Year ended 30 June 2015

Austraclear
Settlement days

Transactions (‘000)
Cash transfers

Fixed interest securities

Discount securities

Foreign exchange

Other

Total transactions

Average daily settlement volume

Securities holdings (monthly average $bn)

Securities holdings (period end $bn)

Average settlement and depository fee (including portfolio holdings) per transaction (excludes registry services revenue)

System uptime (period average)
ASX Trade

CHESS

ASX Trade 24

Futures clearing

Austraclear

Technical services (number at period end)

Liquidity access
ASX sessions

ASX gateways

ASX liquidity cross connects

ASX 24 gateways

ASX ITCH access

ASX OUCH access

ASX 24 liquidity cross connects

ASX 24 ITCH access

Community and connectivity
ASX Net connections

ASX Net service feeds

Australian Liquidity Centre service connections

Application services
ASX Trader/ASX Best terminals

Hosting
Australian Liquidity Centre cabinets

Other data centre cabinets

Information services
ASX market data terminals – monthly average1
ASX 24 market data terminals – monthly average1
1 New billing methodology applied from FY14, impacting on the number of terminals recorded.

ASX Annual Report 2015 | Transaction levels and statistics

FY11

FY12

FY13

FY14

FY15

253

613

638

237

1,531

6,052

$1,195.4

$1,242.7

$13.15

99.92%

99.96%

99.97%

100.00%

253

616

733

217

1,599

6,319

$1,292.3

$1,330.9

$13.54

99.75%

99.99%

100.00%

99.89%

252

587

763

183

1,566

6,214

$1,374.5

$1,406.8

$14.01

100.00%

99.99%

100.00%

253

600

800

162

1,593

6,298

$1,475.5

$1,571.8

$14.18

99.97%

100.00%

99.95%

254

602

774

157

1,564

6,156

$1,671.5

$1,752.5

$14.88

100.00%

99.97%

100.00%

1,737

1,526

1,431

1,185

321

431

N/A

134

189

N/A

743

N/A

302

352

N/A

154

N/A

125

270

110

609

248

272

221

140

356

415

491

117

233

241

297

122

356

622

318

142

207

228

357

126

358

679

277

188

67,580

18,616

56,727

19,576

49,964

18,829

66,701

18,497

74,793

17,824

ASX Limited – ordinary shares

On-market buy-back

There is no current on-market buy-back.

Substantial shareholders at 31 July 2015

The following organisation has disclosed a substantial shareholder notice to ASX.

Shareholder
information

ASX has ordinary shares on issue. These are listed
on the Australian Securities Exchange under ASX
code: ASX. Details of trading activity are published
daily in most major Australian newspapers (print,
online and mobile) and by electronic information
vendors, and broadcast on television and radio.

At a general meeting, every shareholder present in
person or by direct vote, proxy, attorney or repre-
sentative has one vote on a show of hands and, on
a poll, one vote for each fully paid share held unless
that share is a ‘default share’.

The ASX constitution classifies default shares as
any shares held above the 15% voting power limit
by one party and its associates.

Distribution of shareholdings at 31 July
2015

Number of
shares held
1 to 1,000

Number of
holders
39,484

Number of
shares
15,568,965

% of
issued
capital
8.04

1,001 to 5,000

5,001 to 10,000

11,922

23,377,160

12.08

876

6,113,513

3.16

Name

UniSuper Limited

Largest 20 shareholders at 31 July 2015

Name
1. HSBC Custody Nominees (Australia) Limited

2. National Nominees Limited

3. J P Morgan Nominees Australia Limited

4. Citicorp Nominees Pty Limited

5. BNP Paribas Noms Pty Limited

6. Bond Street Custodians Limited

7. RBC Dexia Investor Services Australia Nominees Pty Limited

8. UBS Wealth Management Australia Nominees Pty Limited

9. Navigator Australia Limited

10. BT Portfolio Services Limited

11. Milton Corporation Limited

10,001 to
100,000

100,001 and
over

Total

686

22,152,960

11.44

12. Australian Foundation Investment Company Limited

13. Avanteos Investments Limited

103 126,382,564

65.28

14. AMP Life Limited

15. The Senior Master of the Supreme Court (Common Fund No 3 A/C)

53,071

193,595,162 100.00

The number of investors holding less than a
marketable parcel of 12 ASX shares (based on a
share price of $44.45) was 317. They hold 1,280
ASX shares in total.

16. Brickworks Limited

17. Law Venture Pty Ltd

18. Asgard Capital Management Ltd

19. Invia Custodian Nominees Pty Limited

20. Gwynvill Trading Pty Limited

Total

Number
of shares

% of voting
power

10,098,898

5.22

Number
of shares
42,612,669

29,099,334

23,267,452

9,993,908

4,412,897

2,929,870

1,632,408

805,569

601,606

578,169

532,965

458,685

416,164

362,336

332,134

325,500

310,365

305,187

302,023

241,559

% of issued
capital
22.01

15.03

12.02

5.16

2.28

1.51

0.84

0.42

0.31

0.30

0.28

0.24

0.21

0.19

0.17

0.16

0.12

119,520,800

61.74

ASX Annual Report 2015 | Shareholder information

Shareholders’ calendar

Annual General Meeting 2015

Electronic communication

FY15

Full-year financial
results announcement

Full-year final dividend
Ex-dividend date

Record date for
dividend entitlements

20 August 2015

2 September 2015

4 September 2015

Payment date

23 September 2015

Annual General Meeting

30 September 2015

The ASX AGM will be held in the ASX Auditorium,
lower ground floor, Exchange Square, 18 Bridge
Street Sydney, New South Wales, at 10am
(Australian Eastern Standard Time) on Wednesday
30 September 2015.

The AGM will be webcast live on the internet at
www.asx.com.au/agm

A copy of the webcast will be placed on the ASX
website after the event.

FY161

Half-year financial
results announcement

Half-year interim dividend
Ex-dividend date

Record date for
dividend entitlements

Payment date

Full-year financial
results announcement

Full-year final dividend
Ex-dividend date

Record date for
dividend entitlements

11 February 2016

The external auditor will be present at the AGM to
answer questions relevant to the external audit.

2 March 2016

4 March 2016

23 March 2016

18 August 2016

7 September 2016

9 September 2016

ASX encourages shareholders to receive informa-
tion electronically.

Shareholders who currently receive information by
post can log in at www.linkmarketservices.com.au
to provide their email address and elect to receive
electronic communications.

ASX emails shareholders when important infor-
mation becomes available such as dividend state-
ments, notices of meeting, voting forms and Annual
Reports.

Electronic communication allows ASX to commu-
nicate with shareholders faster and reduce its
use of paper.

For further information, please contact ASX’s
share registry, Link Market Services, on
1300 724 911 (for the cost of a local call) or
asx@linkmarketservices.com.au

Important information
about dividend payments

Payments are made by direct credit only to
ASX shareholders with registered addresses in
Australia, New Zealand and the United Kingdom.
No cheque payments are made.

If you have not already done so, please
provide direct credit instructions by visiting
www.linkmarketservices.com.au

Payment date

28 September 2016

Annual General Meeting
1 Dates are subject to final ASX Board approval.

28 September 2016

ASX Annual Report 2015 | Shareholder information