The Reserve Bank of Australia (RBA) and the Australian Securities and Investments Commission (ASIC) have taken further steps to address concerns of ASX following a major settlement failure in December 2024.
Reserve Bank of Australia, ASIC Take Further Steps to Address ASX Concerns
In a press release on Monday, the regulators cited serious concerns over ASX’s management of operational risks and the speed of its response to the incident.
In a joint letter to ASX, the RBA and ASIC highlighted the risk that further operational failures could undermine the reliability of the CHESS system until its replacement is completed.
In response, the RBA has reassessed ASX Clear Pty Limited and ASX Settlement Pty Ltd, downgrading their compliance with the “Operational Risk” standard from “partly observed” to “not observed,” signalling serious issues of concern requiring immediate action.
It was stated that ASIC has also directed ASX to engage an independent expert to conduct a technical review of CHESS, with the aim of strengthening the system’s operational resilience and restoring confidence in its stability.
RBA Governor Michele Bullock called the situation “deeply disappointing,” stressing that ASX’s management of operational risk has been an ongoing concern.
“The underlying issues that we have raised need to be addressed as a matter of priority,” she said.
ASIC Chair Joe Longo warned that further regulatory action could follow if ASX fails to act swiftly. “It is troubling that these risks were realised in this major incident,” he said.
The regulators have made it clear that ASX must prioritise remediation efforts, with potential new regulatory measures under consideration should further issues arise.
