In May, ASX published a circular announcing that fail fees would be increased, and that a new rule would be introduced ‘…to require..close-out (of) any settlement shortfalls after T+5’.  Any positions not resolved by T+10 would be referred for disciplinary action. (ASX Circular 244/08 26 May 2008). 
 
In June, Members met with ASX to discuss these measures.  Some practical issues were noted, for example late settlement due to foreign registry errors, or the problem of buying-back a stock that is illiquid.  The buying-back of such stocks could have a material price effect, which could then be treated by ASXMS as manipulation. These matters will be taken up with ASXMS.

In addition members warned that the close-out requirement could result in brokers choosing not to trade in certain stocks where the stock could not be borrowed and the market was illiquid.