Media Release Assessment of ASX Clearing and Settlement Facilities – September 2019

The Reserve Bank today released the September 2019 Assessment of the ASX Clearing and Settlement Facilities. The Assessment concludes that ASX's clearing and settlement (CS) facilities ‘observed’ or ‘broadly observed’ all relevant requirements under the Reserve Bank's Financial Stability Standards (FSS) as at 30 June 2019, with the exception of the standard relating to general business risk, which was rated as ‘partly observed’ in each facility.

On balance, the Bank has concluded that the facilities have conducted their affairs in a way that causes or promotes overall stability in the Australian financial system. However, the facilities will need to place a high priority on addressing the recommendations related to general business risk. The Bank has made a number of other recommendations for the ASX CS facilities to address in order to observe or continue to observe the FSS.

The Assessment also describes progress made by the ASX CS facilities in addressing recommendations of the 2018 Assessment, including to strengthen ASX's technology governance and management of operational risk via its Building Stronger Foundations program.

Background

The Reserve Bank is responsible for the supervision of Australian-licensed CS facilities focusing on the reduction of systemic risk. It sets FSS that these facilities are required to meet. Systemically important CS facilities are assessed against the FSS on a regular basis.

In the case of the ASX Group, the Reserve Bank conducts annual assessments of the four CS facilities in the ASX Group: two central counterparties (CCPs) – ASX Clear Pty Limited and ASX Clear (Futures) Pty Limited – and two securities settlement facilities (SSFs) – ASX Settlement Pty Limited and Austraclear Pty Limited. These assessments include a rating of the CS facilities' observance of each of the FSS.

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.

The Australian Securities and Investments Commission (ASIC) has separate, but complementary, responsibilities for the supervision of CS facilities focused on the fair and effective provision of services.