Assessment of ASX Clearing and Settlement Facilities – September 2019 Appendix A: 2018 Areas of Supervisory Focus

Table 6: Summary of Progress against 2018 Areas of Supervisory Focus
Development Standard Facility Actions
Special Topic
Legal basis special topic. The Bank will carry out a special topic assessment of the ASX CS facilities' legal basis, with a secondary focus on the facilities' arrangements for settlement finality and the ASX CCPs' segregation and portability arrangements. CCP Standards 1, 8 and 13, SSF Standards 1 and 7 All facilities The Bank performed an assessment of the ASX CS facilities' legal basis, with a secondary focus on the facilities' arrangements for settlement finality and the ASX CCPs' segregation and portability arrangements. This forms the special topic of this assessment. For more information, see section 3.
Review of Planned Work

CCP Resilience Guidance. Implementation of ASX's plans to address gaps against the CCP Resilience Guidance that are minor but indicative of good practice in financial risk management, and consideration of how to take into account other minor gaps that ASX does not currently have specific plans to address.

CCP Standards 2, 4, 5, 6, 7 and 15 Both CCPs The ASX CCPs have established a multi-year work program to address these gaps. For more information, see section 2.1.
Risk system enhancements. The implementation of ASX's longer-term plans to improve its CCP risk systems. CCP Standards 4, 5, 6 and 7 Both CCPs ASX has continued to make incremental enhancements to its risk management systems. For more information, see section 2.1.3.
Liquid resources. The review of the adequacy of liquid resources held by the ASX CCPs, as part of the ASX CCPs' annual default fund reviews. CCP Standard 7 Both CCPs The adequacy of liquid resources held by the ASX CCPs were reviewed as part of the ASX CCPs' annual default fund reviews. For more information, see section 2.1.1.
CHESS replacement. The development of the new clearing and settlement system for cash market transactions, including how the new system aligns with the requirements in the FSS, and the clarity, effectiveness and documentation of default management processes. CCP Standard 14 ASX Clear and ASX Settlement The Bank has continued its engagement with ASX on its CHESS replacement project. ASX released its response to an earlier consultation on the proposed functionality of the replacement system and has commenced building the system. For more information, see section 2.4.

Cyber resilience. Continued enhancement of ASX's cyber resilience via:

  • the implementation of actions identified in ASX's Cyber Strategy roadmap
  • ASX's evaluation of current and emerging technology that could lead to further enhancements to the abilities of ASX to recover from cyber attacks in a timely manner.
CCP Standard 16, SSF Standard 14 All facilities ASX has progressed work to implement actions in its Cyber Strategy roadmap. Work to evaluate technology that could further enhance recovery capabilities is expected to take longer to progress. For more information, see section 2.4.