RBA Slams ASX Entities Over Governance and Risk Management Failures

The Reserve Bank of Australia (RBA) recently released an assessment of four key ASX entities that play a crucial role in clearing and settling trades. The entities, which include ASX Clear, ASX Clear (Futures), ASX Settlement, and Austraclear, were evaluated against financial stability standards aligned with international principles for financial market infrastructures.

According to the RBA's assessment, one or more of these facilities only 'partly observed' the relevant standards in four areas: governance, framework for comprehensive management of risks, credit risk, and operational risk. This is a concerning finding, especially given that the facilities are critical to Australia's capital markets.

One area of improvement noted by the RBA was ASX's Transformation Portfolio, which spans governance, capability, culture, and risk management. The RBA sees this portfolio as a potential pathway for the facilities to meet the expected standards.

The assessment highlights the importance of these entities in maintaining financial stability and the need for them to adhere to high standards. The RBA will continue to monitor their progress and ensure that they meet the required standards.