The Reserve Bank of Australia (RBA) has released its 2025 assessment of the ASX Clearing and Settlement (CS) Facilities, evaluating their performance against the RBA’s Financial Stability Standards. The assessment found that ASX needs to make significant improvements to meet expectations for operators of critical market infrastructure.
According to the RBA, recent shortcomings in risk management, particularly an incident involving CHESS batch settlement in December 2024, have shown that foundational changes are required at ASX. The bank emphasized the need for enhancements in governance, culture, and risk management processes. The RBA also called on ASX to speed up efforts to strengthen operational and financial risk management while meeting important milestones for major technology projects. The central bank stated it will closely monitor progress over the coming year.
The assessment rated many of the individual standards as “observed” or “broadly observed.” However, one or more CS facilities were found to “partly observe” requirements under standards relating to comprehensive risk management frameworks, governance, credit risk, settlement finality, and operational risk. Both ASX Clear and ASX Settlement continue to be rated as “not observed” on the Operational Risk Standard following a special review in March 2025.
The RBA issued several recommendations for improvement. These include obtaining assurance that gaps in the risk appetite statement and strategy are addressed; ensuring adequate resourcing and regular reporting on its risk transformation plan; reviewing business continuity and contingency arrangements across CS facilities; and improving data controls for financial risk models.
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 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," Jones added.
The RBA is responsible for supervising Australian-licensed CS facilities with a focus on financial stability and reducing systemic risk. It conducts annual assessments of four ASX 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.
ASIC also supervises CS facilities with responsibilities complementary to those of the RBA. Both organizations coordinate closely during supervision activities.