ASX to implement all recommendations from RBA’s 2023 FSS assessment
Today the Reserve Bank of Australia (RBA) released its Financial Stability Standards (FSS) assessment of ASX’s clearing and settlement (CS) facilities.
The assessment is conducted annually and provides ratings of ASX’s CS facilities. This year ASX was rated as observed or broadly observed for many of the FSS and three standards were rated as partly observed.
This year’s assessment covers the period from 1 July 2022 to 30 June 2023 which includes ASX’s decision last November to reassess the CHESS replacement project and revisit the solution design. The assessment also coincides with a period of significant change and reset at ASX where the Group has continued its Board renewal program, undertaken significant executive management change, launched a new five-year strategy and expanded business investment underpinned by revised capital management settings.
The assessment required ASX to place high priority on recommendations related to board process, internal audit, stakeholder management and the management of ageing technology assets, including CHESS.
ASX Chair Damian Roche said:
“We accept the RBA’s recommendations in full and acknowledge there’s continued work to do. Many of the concerns outlined by the RBA have already been in focus for ASX, and while some items are well progressed, ASX will now incorporate the work from the new recommendations. “Changes have been underway for more than 18 months and we are cognisant there is more work to do to restore trust. Some of the key changes that have taken place include Board renewal and significant change in leadership to underpin the cultural transformation and operational risk uplift at ASX.”
The RBA acknowledged recent developments at ASX, specifically noting in its report that “under the leadership of a new Chief Executive Officer, the Bank has observed improved engagement and an increased commitment to transparency in ASX’s dealings with the Bank.”
ASX Managing Director and CEO Helen Lofthouse said:
“This assessment aligns with the view of the ASX Board and I that we are not where we want to be in some key areas. We are making changes to remediate issues and strengthen our overall capability, although we recognise it will take time for these changes to be fully embedded. There is certainly more work to do but we are clear on the path ahead and I’m confident the actions we’re taking will continue to build on the foundations of an enduring and high quality business.”