ASX faces more RBA, ASIC scrutiny after collapse of blockchain project
RBA Governor Philip Lowe said it expected the highest priority to be given to ensuring the stability and resilience of the critical infrastructure supporting Australia’s cash equity markets.
“This needs to be the focus of the current CHESS as well as in reviewing the design and implementation of the replacement. The RBA also expects to see further lift from the ASX in respect of its governance arrangements,” he said.
The ASX had invested in the technology project since 2017, but announced in November that it was being scrapped.Credit:Louie Douvis
Both regulators said they were considering further action and were “prepared to adopt a range of regulatory options to ensure ASX Clear and ASX Settlement comply with regulators’ expectations and comply with their … obligations”.
“The regulators’ coordinated action today demonstrates the shared immediate concern that current CHESS is supported and sustained to ensure stability, resilience and longevity so that it can continue to serve the market reliably,” they said.
In a statement, the ASX said it would act in accordance with the new requirements and expectations and engage with regulators.
“Maintaining the stability, security and high performance of today’s CHESS, which is critical to the operation of Australia’s financial markets, is an ASX priority,” ASX CEO Helen Lofthouse said.
“With the improvements we have made to the system’s capacity and resilience in recent years, and the investments we will continue to make, ASX is confident that the current CHESS will serve the Australian market well into the future.”
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The exchange operator announced in November that it would re-evaluate all aspects of the CHESS replacement project following the completion of an independent review, carried out by Accenture, and its own internal assessment. The costs incurred will be written off “in light of the resolution uncertainty”, resulting in a pre-tax charge of $245 million to $255 million for the December half year, the ASX said in a statement to investors.
The ASX had been investing in the technology project since 2017, and the start date had been pushed back due to a number of factors, including COVID-19, industry complaints about a lack of consultation and technology setbacks.
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