Media Release Report on Clearing and Settlement Facilities

Under Part 7.3 of the Corporations Act 2001, the Reserve Bank is required, at least once each year, to assess how well clearing and settlement facility licensees have complied with their obligations to meet the Financial Stability Standards determined by the Reserve Bank. A report of the assessments must be provided to the Minister with portfolio responsibility for financial markets, and to the Australian Securities and Investments Commission (ASIC). Separately, the Payments System Board is required by the Reserve Bank Act 1959 to report on developments in the clearing and settlement industry, as well as on any changes to the Financial Stability Standards.

For 2006/07 the Reserve Bank has met these reporting obligations in a single report, which was provided to the Minister and ASIC in December 2007. The Reserve Bank, in consultation with the Australian Securities Exchange, has decided to publish this report to enhance the transparency of the oversight process and promote understanding of what are complex issues. The report is available on the Reserve Bank's website. Previously, the work of the Reserve Bank in this area has been discussed in the Annual Reports of the Payments System Board.

The Reserve Bank has assessed the following four licensees under its Corporations Act obligations:

• Australian Clearing House (ACH), which provides central counterparty clearing services for a range of financial products, including equities, traded on the ASX market;
• SFE Clearing Corporation (SFECC), which provides central counterparty services for derivatives traded on the SFE market;
• ASX Settlement and Transfer Corporation (ASTC), which provides settlement services for most transactions on the ASX market; and
• Austraclear, which provides settlement services for derivatives and over‑the‑ counter trades in debt securities.

Each of these licensees has been assessed to be in compliance with the relevant standard.