Assessment of ASX Clearing and Settlement Facilities Appendix C: The Assessment Framework

This 2021 Assessment sets out the Reserve Bank's assessment of how well ASX Clear and ASX Clear (Futures) have observed the CCP Standards, and how well ASX Settlement and Austraclear have observed the SSF Standards, as at 30 June 2021. In setting out its assessment, the Bank has applied the rating system used in CPMI and IOSCO's Principles for Financial Market Infrastructures: Disclosure Framework and Assessment Methodology.[37] Under this framework, the Bank has assessed each of the ASX CS facilities' observance of the requirements of each of the applicable FSS as being:

  • Observed – Any identified gaps and shortcomings are not issues of concern and are minor, manageable and of a nature that the facility could consider taking them up in the normal course of its business.
  • Broadly observed – The assessment has identified one or more issues of concern that the facility should address and follow up on in a defined timeline.
  • Partly observed – The assessment has identified one or more issues of concern that could become serious if not addressed promptly. The facility should accord a high priority to addressing these issues.
  • Not observed – The assessment has identified one or more serious issues of concern that warrant immediate action. Therefore, the facility should accord the highest priority to addressing these issues.
  • Not applicable – The standard does not apply to the type of facility being assessed because of the particular legal, institutional, structural or other characteristics of the facility.

Section 821A(aa) of the Corporations Act requires that a CS facility licensee must, to the extent that it is reasonably practicable to do so, comply with the FSS and do all other things necessary to reduce systemic risk. In assessing how well a CS facility complies with a CCP or SSF Standard, the Bank has assessed how well the facility complies with the headline standard and each of the ‘sub-standards’ listed under the headline standard. A single overall rating is applied to each CCP or SSF Standard, reflecting this assessment.

The Bank's assessment of compliance with the FSS is based on information gathered:

  • through the Bank's regular liaison with ASX staff
  • as part of detailed review against specific FSS (‘special topics’)
  • via the supply of regular data and reports by ASX
  • through a series of specific information requests and meetings with ASX during and immediately following the assessment period.

Supplementary interpretation of CCP Standards

In assessing how well ASX Clear and ASX Clear (Futures) have observed certain sub-standards of the CCP Standards, the Bank has applied the supplementary interpretation of these sub-standards issued by way of an exchange of letters with ASX in October 2014.[38] This supplementary interpretation supersedes the Bank's previous supplementary interpretation of the CCP Standards issued in August 2013. The supplementary interpretation of the CCP Standards applies to any domestically licensed derivatives CCP that provides services to participants that are either established in the EU or subject to EU bank capital regulations, and affects CCP Standards 2.6, 4.2, 4.4, 6.3, 7.3, 13.2, 13.3, 15.4 and 21.

Footnotes

Available at <http://www.bis.org/cpmi/publ/d106.htm>. [37]

This letter is available at <https://www.rba.gov.au/payments-and-infrastructure/financial-market-infrastructure/clearing-and-settlement-facilities/pdf/supplementary-guidance-domestic-derivatives-ccps.pdf>. [38]