2012/13 Assessment of ASX Clearing and Settlement Facilities B2.1: ASX Settlement

Financial Stability Standards for Securities Settlement Facilities

The Financial Stability Standards for Securities Settlement Facilities (SSF Standards) are made up of 19 headline standards, each of which is accompanied by a number of more detailed sub-standards. In assessing whether a facility has met each of the SSF Standards, the Reserve Bank takes into account associated guidance.^[1] The following provides details of how ASX Settlement Pty Limited (ASX Settlement) and Austraclear Limited (Austraclear)) observe each of the SSF Standards (including sub-standards). It also sets out the Bank's assessment of how well ASX Settlement and Austraclear have complied with each of the SSF Standards during the Assessment period, and provides recommendations for each of the securities settlement facilities (SSFs) to address relevant areas of concern and to encourage steps to further strengthen the SSFs' observance of standards.^[2]

B2.1 ASX Settlement

ASX Settlement is a wholly owned subsidiary of ASX Settlement Corporation Limited, itself a wholly owned subsidiary of ASX Limited (see ‘ASX Group Structure’ in Appendix B). ASX Settlement is an SSF that provides settlement services for the ASX market and, through ASX's Trade Acceptance Service, Approved Market Operators (AMOs) such as Chi-X Australia Pty Ltd (Chi-X). ASX Settlement also provides a delivery-versus-payment (DvP) service for a small number of transactions undertaken on other markets that provide a platform for trading securities that are not listed on the ASX market, such as the National Stock Exchange of Australia, through ASX's Settlement Facilitation service. This service is an alternative to the transfer service previously offered to these Approved Listing Market Operators (ALMOs).

• Standard 1: Legal Basis
• Standard 2: Governance
• Standard 3: Framework for the Comprehensive Management of Risks
• Standard 4: Credit Risk
• Standard 5: Collateral
• Standard 6: Liquidity Risk
• Standard 7: Settlement Finality
• Standard 8: Money Settlements
• Standard 9: Central Securities Depositories
• Standard 10: Exchange-of-value Settlement Systems
• Standard 11: Participant Default Rules and Procedures
• Standard 12: General Business Risk
• Standard 13: Custody and Investment Risks
• Standard 14: Operational Risk
• Standard 15: Access and Participation Requirements
• Standard 16: Tiered Participation Arrangements
• Standard 17: FMI Links
• Standard 18: Disclosure of Rules, Key Policies and Procedures, and Market Data
• Standard 19: Regulatory Reporting

Footnotes

The guidance is available at <https://www.rba.gov.au/payments-system/clearing-settlement/standards/securities-settlement-facilities/2012/>. [1]

For an explanation of the Bank's Assessment approach and the ratings scale used, see introduction to Appendix B. [2]