Today, ASIC and the RBA (the Regulators) issued a joint letter outlining regulatory
expectations of ASX Clear Pty Limited (ASX Clear) and ASX Settlement
Pty Limited (ASX Settlement) when engaging with the newly established ASX
Cash Equities Clearing and Settlement Advisory Group (Advisory Group).
The Advisory Group, with Independent Chair Alan Cameron AO, was established to advise ASX Clear and
ASX Settlement on strategic clearing and settlement issues following longstanding industry concerns over
the CHESS replacement program. Concerns raised included the adequacy of ASXs stakeholder engagement
and governance process and ASXs management of intragroup conflicts of interest.
The letter requires ASX Clear and ASX Settlement to resource, consult and engage with the Advisory Group
in good faith and in the public interest.
ASIC Chairman Joe Longo said, The Advisory Groups role in assisting ASX Clear and ASX
Settlement on the CHESS replacement program is vital to this process. Genuine collaboration between ASX,
the Advisory Group and industry will be necessary to achieve the best outcome for the market, for listed
companies and investors.
As the operator of critical national infrastructure, ASX must be held to the highest standards. We
are prepared to use all available regulatory measures to ensure ASX Clear and ASX Settlement comply with
our expectations and obligations under the Corporations Act. This includes measures under the current
regulatory framework and any new powers ASIC receives under the Governments proposed Competition in
Clearing and Settlement Reforms and Financial Market Infrastructure Regulatory Reforms.
RBA Deputy Governor Michele Bullock said, It is important that the markets trust and
confidence in the CHESS replacement program is restored. To do this, the program requires a fresh and
collaborative approach that draws on the advice and perspectives of a range of experienced professionals.
It is important that ASX and the Advisory Group work collaboratively to a solution that is in the public
The Regulators will actively monitor ASX Clear and ASX Settlements engagement with the Advisory
ASX Clear and ASX Settlement are expected to formally acknowledge the Regulators joint letter and
provide a public undertaking that it will comply with these expectations by 31 August 2023.
ASIC and the RBA are co-regulators of licensed clearing and settlement (CS) facilities.
The RBA and ASIC have supervisory responsibilities for the four CS facilities in the ASX Group: two
central counterparties – ASX Clear Pty Ltd and ASX Clear (Futures) Pty Ltd – and two
securities settlement facilities – ASX Settlement Pty Ltd and Austraclear Limited.
The RBA conducts annual assessments covering the CS facilities observance of relevant Financial
Stability Standards determined by the RBA. ASIC has separate, but complementary, responsibilities for the
licensing and supervision of CS facilities licensed under Part 7.3 of the Act. ASIC is responsible
for assessing whether a CS facilitys services are provided in a fair and effective way. ASIC also
has regulatory responsibilities for operators of licensed markets, including the ASX market. In carrying
out supervision and assessments of CS facilities, the RBA and ASIC work closely as appropriate.