2015/16 Assessment of ASX Clearing and Settlement Facilities A2.1 ASX Settlement Standard 13: Custody and investment risks

A securities settlement facility should safeguard its own and its participants' assets and minimise the risk of loss on and delay in access to these assets. A securities settlement facility's investments should be in instruments with minimal credit, market and liquidity risks.

ASX Settlement does not have any financial investments, and its participants do not lodge collateral or other assets with the SSF. $170.6 million of general business risk capital for both ASX Settlement and Austraclear is invested at the group level. Arrangements for the investment of those funds are discussed under SSF Standard 12.

The Bank has concluded that SSF Standard 13 does not apply to ASX Settlement.

13.1 A securities settlement facility should hold its own and its participants' assets at supervised and regulated entities that have robust accounting practices, safekeeping procedures and internal controls that fully protect these assets.

Not applicable to ASX Settlement.

13.2 A securities settlement facility should have prompt access to its assets and the assets provided by participants, when required.

Not applicable to ASX Settlement.

13.3 A securities settlement facility should evaluate and understand its exposures to its custodians, taking into account the full scope of its relationships with each.

Not applicable to ASX Settlement.

13.4 A securities settlement facility's investment strategy should be consistent with its overall risk management strategy and fully disclosed to its participants, and investments should be secured by, or be claims on, high-quality obligors. These investments should allow for quick liquidation with little, if any, adverse price effect.

Not applicable to ASX Settlement.