RBA Maintains Pressure on ASX Over Clearing Shortcomings

The Reserve Bank of Australia (RBA) has expressed continued pressure on the Australian Securities Exchange (ASX) due to shortcomings in its clearing and settlement facilities. The RBA's assessment, conducted in September 2023, found that ASX failed to meet expectations in several key areas, including governance and risk management.

These issues have been ongoing since ASX abandoned its blockchain-based CHESS replacement project in 2022 following a series of operational disruptions. The RBA has maintained heightened regulatory scrutiny on the exchange operator ever since.

The RBA's report noted that ASX had made progress during the year but still failed to meet expectations in several important areas. Austraclear, ASX's debt securities settlement facility, was rated 'partly observed' against operational risk standards, with the RBA stating that further work is needed to ensure critical services can be maintained during severe or prolonged disruptions.

ASX has established a Transformation Portfolio to address these deficiencies and the central bank has set clear expectations for target outcomes. However, the RBA will continue to maintain heightened supervisory scrutiny of the ASX during the next assessment period, focusing on areas where improvements are needed.