ASX must 'redouble efforts' on CHESS: RBA

The news: The Reserve Bank has told the ASX to redouble its efforts in governance and risk management in relation to the exchange's clearance and settlement (CS) system following a review.

The context: The RBA supervises Australia's CS facilities with a focus on maintaining financial stability and avoiding systemic risks. ASX's CHESS clearance system is 29-years old, and plans to replace it with a blockchain-based solution fell apart last year. In June 2023 the exchange announced it will keep CHESS operating until 2032.

What they said: "It is important that ASX address recommendations related to board oversight, the effectiveness of the internal audit function, stakeholder management and the management of ageing assets," RBA financial system assistant governor Brad Jones said in a statement.

"Given ASX operates critical financial market infrastructure, it is imperative that it continues to conduct its clearing and settlement operations in a way that promotes stability in the Australian financial system."