ASIC has taken further action to ensure that ASX adequately responds to the findings and recommendations of the ASX CHESS Replacement Application Delivery Review by Accenture (the External Review) and that all necessary steps are undertaken by ASX to uplift identified gaps and deficiencies in relation to the ASX Group’s portfolio, program and project management frameworks.
ASIC has issued notices to ASX Limited (ASX), ASX Clear Pty Ltd (ASX Clear) and ASX Settlement Pty Ltd (ASX Settlement) (the ASX Licensees) under sections 794B and 823B of the Corporations Act 2001 (the Act). These notices require the ASX Licensees to produce two special reports covering:
- how the ASX Licensees will respond to the findings and recommendations of the External Review (the External Review Special Report); and
- the ASX Licensees’ current portfolio, program and project management frameworks and an assessment of those frameworks against internationally recognised standards (PPPM Special Report).
These special reports will be audited by Ernst & Young. The External Review Special Report is due to ASIC on 30 June 2023. The associated audit report is due to ASIC on 31 July 2023. The PPPM Special Report is due to ASIC on 29 September 2023 and the associated audit report on 31 October 2023.
‘We consider the External Review Special Report will provide necessary assurance for ASIC and industry that ASX is taking all possible steps to respond to the findings and recommendations outlined in the External Review. More broadly an assessment of ASX’s portfolio, program and project management frameworks against internationally recognised frameworks will demonstrate which components are fit-for-purpose and the measures to be adopted to address identified gaps and deficiencies. These reports will help build confidence in ASX’s ability to deliver the CHESS Replacement and any other programs ASX undertakes,’ ASIC Chair Joe Longo said.
Mr Longo continued, ‘The audited special reports will assist ASIC in its assessment of whether any further regulatory action is required.’
Today’s action follows and supplements the section 823B notices issued to ASX Clear and ASX Settlement on 15 December 2022 to produce a special report on current CHESS and the ASIC-RBA joint letter of expectations issued to the boards of ASX Limited, ASX Clear and ASX Settlement on 17 November 2022.
ASIC expects that, taking into account any confidential commercial and security information, versions of the External Review Special Report and PPPM Special Report will be made publicly available.
Background
ASIC and the RBA are co-regulators of licensed clearing and settlement (CS) facilities.
Under sections 794B(1) and 823B(1)of the Act, the Minister may give market licensees and CS facility licensees a written notice requiring the licensee to give ASIC a special report on specified matters. These powers have been delegated to ASIC.
More information
- 22-357MR ASIC – RBA further regulatory response regarding the ASX CHESS replacement program
- 22-320MR ASIC-RBA joint statement on ASX CHESS replacement program
- 21-313MR ASIC imposes additional licence conditions on ASX and issues expectations to improve market resilience
- 20-229MR ASIC and RBA announce expectations for CHESS replacement