ASX today published a statement acknowledging that the Australian Securities and Investments Commission (ASIC) and the Reserve Bank of Australia (RBA) have set out their immediate requirements and expectations of ASX about current CHESS and the plan to replace it.

ASIC requires ASX to prepare a special report about arrangements for current CHESS. Additionally, the RBA expects ASX to maintain current CHESS sufficiently, which ASX has undertaken to do in a letter to the RBA Governor

ASX says it will act in accordance with these requirements and expectations, and will engage proactively and transparently with the regulatory agencies and other stakeholders on this work. The special report ASX is preparing for ASIC will detail how ASX will ensure that current CHESS is supported and maintained until the go-live of the CHESS replacement system. It will also cover the ongoing operation, security and continuity of CHESS, and ASX’s governance arrangements for the current system.

ASX will also provide ASIC with an EY audit of the report. In line with ASIC’s expectations, ASX will make a version of the special report and audit report publicly available.

ASX Managing Director and CEO Helen Lofthouse said:

“Maintaining the stability, security and high performance of current CHESS, which is critical to the operation of Australia’s financial markets, is an ASX priority. With the enhancements we have made to the system’s capacity and resilience in recent years, and the investments that we will continue to make, ASX is confident that current CHESS will serve the Australian market well into the future”.

Today, the regulators said they will continue to consider the need for further regulatory responses to ASX’s recent decision and announcement to pause the CHESS Replacement program on 17 November 2022. ASIC and RBA are prepared to bring to bear a range of regulatory options to ensure that ASX Clear and ASX Settlement adhere to the regulators’ expectations and comply with their CS facility licence obligations.