Assessment of ASX Clearing and Settlement Facilities – September 2025 Executive Summary
The Reserve Bank of Australia (RBA) has carried out its annual assessment of the ASX clearing and settlement (CS) facilities over the period 1 July 2024 to 30 June 2025. The assessment covers the four licensed CS facilities in the ASX Group (ASX): two central counterparties (CCPs) – ASX Clear and ASX Clear (Futures); and two securities settlement facilities (SSFs) – ASX Settlement and Austraclear. The RBA has assessed the CS facilities’ compliance with applicable Financial Stability Standards (FSS), as well as the CS facilities’ general obligation to do all other things necessary to reduce systemic risk.
ASX remains under close regulatory scrutiny due to ongoing concerns about its operational resilience, governance and ability to manage critical infrastructure amid competing priorities. ASX has made some progress, for instance, in moving towards the Release 1 delivery target for the CHESS Replacement program. However, recent incidents and resource constraints continue to raise serious questions about ASX’s capacity to deliver the level of resilience required for a provider of critical market infrastructure.
The ASX CS facilities observe or broadly observe many of the FSS. There are five FSS for which some or all ASX CS facilities were rated as either partly observed or not observed: Operational Risk, Framework for Comprehensive Management of Risks, Governance, Credit Risk and Settlement Finality.
On 20 December 2024, a memory allocation issue led to the CHESS batch failing to settle (the December CHESS incident). This incident reinforced concerns about risk management at ASX and underscored that there is still substantial work to be done. In response to some of the issues identified, the RBA downgraded the rating for operational risk for ASX Clear and ASX Settlement to not observed. In this assessment, the RBA has also downgraded the rating for ASX Settlement against the Settlement Finality Standard to partly observed.
ASX’s initial response to the recommendations from the out-of-cycle assessment fell well short of RBA expectations. This raised further questions as to whether interaction between the ASX executive and boards is effective and whether board scrutiny and challenge is being appropriately reflected in actions taken by the executive. Effective operational risk management is essential. ASX must move quickly towards best practice, at all levels, for an operator of critical market infrastructure.
The ASX CCPs’ ratings against the Credit Risk Standard have been downgraded to partly observed. The RBA was disappointed by the number of issues identified with ASX’s financial risk models over the assessment period. The RBA expects ASX to prioritise improving its model validation and control testing frameworks, particularly its data and reporting controls.
It is a high priority that ASX remediate immediate issues related to the resilience of the current CHESS and safely deliver the CHESS Replacement project. However, the RBA also expects ASX to rapidly develop its broader risk management approach to ensure the resilience of all CS facilities. This will likely require both an evolution of ASX’s governance and risk management frameworks and steps to manage the evolving risk environment in areas such as vendor management, legacy technology systems and cyber resilience. It is crucial that ASX is adequately resourced to deliver on the required change while also ensuring the continuity of its critical services.