The Reserve Bank of Australia today released the 2025 Assessment of the ASX Clearing and Settlement (CS) Facilities. The document assesses the performance of the ASX CS Facilities against the Bank’s Financial Stability Standards.
RBA concludes that ASX has considerable work to do to meet the Bank’s expectations for an operator of critical market infrastructure. Recent shortcomings in risk management – particularly the December 2024 CHESS batch settlement incident – have highlighted that ASX must make foundational changes to its governance, culture and risk management processes.
ASX must also accelerate its uplift of operational and financial risk management, while meeting key milestones for its major technology projects. Delivering on these initiatives will require appropriate resourcing and the RBA will be closely monitoring progress over the coming year.
The ASX CS facilities were rated as having ‘observed’ or ‘broadly observed’ many of the individual Standards.
The Bank assessed that one or more of the CS facilities ‘partly observed’ requirements under the specific Standards on the Framework for Comprehensive Management of Risks, Governance, Credit Risk, Settlement Finality, and Operational Risk.
ASX Clear and ASX Settlement continue to be rated as ‘not observed’ on the Operational Risk Standard, following the Bank’s out-of-cycle assessment against this Standard in March 2025.
The Bank has issued a number of recommendations, including that ASX should: obtain assurance that it has addressed gaps in its risk appetite statement and strategy to return to risk appetite ensure its risk transformation plan is appropriately resourced and implement regular reporting on the plan conduct a review of business continuity and contingency arrangement across the CS facilities comprehensively improve data and reporting controls for financial risk models and address issues identified in the assessment period.
The Bank conducts annual assessments of ASX’s four CS facilities: two central counterparties – ASX Clear Pty Limited and ASX Clear (Futures) Pty Limited – and two securities settlement facilities – ASX Settlement Pty Limited and Austraclear Limited. These assessments include a rating of the CS facilities’ observance against each financial stability standard.
ASIC has separate, but complementary, responsibilities for the supervision of CS facilities. In carrying out supervision of CS facilities, the RBA works closely with ASIC.
ASX CEO Helen Lofthouse commented:
“We are acutely aware ASX must accelerate our progress to rebuild trust with our regulators, particularly following the disappointing incidents of the past year.
As we are in the middle of our transformation, the recommendations outlined in the RBA’s report reflect and align with our views of where additional focus and improvement is needed.
In the area of operational risk, we are keenly focused on our contingency arrangements for CHESS. We have already completed several key items, such as fixing code and increasing memory, that will improve the resilience of the core system. And we are now progressing plans for various workarounds that should further improve contingency arrangements.
Transforming a complex market infrastructure organisation is a marathon effort and we know that many of our initiatives require sustained effort over several years to deliver the benefits. Our focus on improving operational risk and resilience forms the centrepiece of the Accelerate program which will be the vehicle to ensure we execute well. It is a must-not-miss priority for ASX.”
