The Reserve Bank of Australia has released its 2025 Assessment of the ASX clearing and settlement facilities, warning that ASX has “considerable work to do” to meet expectations for an operator of critical market infrastructure after recent shortcomings in risk management, including the December 2024 CHESS batch settlement incident.
The central bank said ASX must make foundational changes to its governance, culture and risk management processes, accelerate its uplift of operational and financial risk management, and hit key milestones on major technology projects. It added that delivering on these initiatives will require appropriate resourcing and that it will closely monitor progress over the coming year.
The ASX CS facilities were rated as having ‘observed’ or ‘broadly observed’ many of the individual Standards. However, 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.
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.’
The Bank issued several recommendations, including that ASX obtain assurance it has addressed gaps in its risk appetite statement and its strategy to return to risk appetite; ensure its risk transformation plan is properly resourced with regular reporting; review business continuity and contingency arrangements across the CS facilities; and comprehensively improve data and reporting controls for financial risk models while fixing issues identified during the assessment period.
The RBA is responsible for supervising Australian-licensed clearing and settlement facilities with a focus on financial stability and the reduction of systemic risk. It conducts annual assessments of ASX’s four CS facilities: central counterparties ASX Clear Pty Limited and ASX Clear (Futures) Pty Limited, and securities settlement facilities ASX Settlement Pty Limited and Austraclear Limited. ASIC has separate, complementary responsibilities for supervising CS facilities, with the two regulators working closely together.
