The Reserve Bank of Australia today released the 2025 Assessment of the ASX Clearing and Settlement (CS) Facilities. This assesses the performance of the ASX CS Facilities against the Bank's Financial Stability Standards (Standards).
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.
RBA Assistant Governor (Financial System) Brad Jones said: 'ASX is not currently meeting the regulators' expectations for an operator of critical national infrastructure. Resilient and secure CS facilities are crucial to the stability of the Australian financial system.
'This assessment highlights that ASX still has more work to do to in strengthening its governance, risk culture, and frameworks for managing operational and financial risk. We are expecting meaningful progress over the coming year and will consider further regulatory responses if necessary.'
Background
The Reserve Bank is responsible for the supervision of Australian-licensed CS facilities with a focus on financial stability and the reduction of systemic risk. Systemically important CS facilities are assessed on a regular basis against the Financial Stability Standards determined by the Bank.
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.
For more information on the Bank's approach to assessing CS facilities, see: The Reserve Bank's Approach to Supervising and Assessing Clearing and Settlement Facility Licensees.
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.
