ASX on Notice: The Four Standards Where the RBA Still Rates It "Partly Observed"

Sonal Goyal

03 November 2026 05:00 PM AEDT

ASX on Notice: The Four Standards Where the RBA Still Rates It

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The Reserve Bank's latest assessment of ASX's clearing and settlement facilities, released on 23 September 2026, rated four standards as only "partly observed" at one or more facilities, even as it recorded an upgrade on operational risk after improvements to CHESS.

Most investors think about the ASX in terms of share prices. Far fewer think about what happens after a trade is struck: the clearing and settlement processes that ensure shares and money change hands as they should. Those processes are critical infrastructure, and the Reserve Bank of Australia assesses them against a set of financial stability standards.

The RBA's assessment, published in a media release on 23 September 2026, did not give ASX a clean bill of health. Brad Jones, the RBA's Assistant Governor (Financial System), put it plainly: ASX "is still not meeting the RBA's expectations in several important areas."

The four standards in question

The assessment rated ASX as "partly observed" on four standards at one or more of its facilities:

Governance
Comprehensive Management of Risks
Credit Risk
Operational Risk.

"Partly observed" sits below full observance. Broadly, it indicates the RBA judged that the relevant Facility was meeting some, but not all, of what the standard requires. The rating applied at one or more facilities, so it is not necessarily the case that every ASX entity fell short on every one of the four.

Each standard covers a different dimension of how a clearing and settlement facility works:

Governance is about how the organisation is run and overseen, including how decisions are made and accountability is assigned.
Comprehensive Management of Risks concerns whether the facility has a framework to identify and manage the full range of risks it faces, rather than dealing with them piecemeal.
Credit Risk relates to the risk of losses if a participant cannot meet its obligations.
Operational Risk covers the systems, processes and people that keep the facility running, and how well it copes when something goes wrong.

Those descriptions are general explanations of the categories rather than a summary of the RBA's detailed findings. The key fact from the assessment is the rating itself.

An upgrade, but from a low base

There was one notable improvement. ASX Clear and ASX Settlement were upgraded from "not observed" to "partly observed" on Operational Risk. The upgrade came after improvements to CHESS following the December 2024 batch settlement incident.

CHESS is the system at the heart of ASX's clearing and settlement of Australian equities. The December 2024 incident involved batch settlement, the process by which a day's trades are settled together. Before the upgrade, those facilities had been rated "not observed" on Operational Risk.

Moving to "partly observed" is progress. But it is worth reading the upgrade carefully. The operational risk standard is still not fully observed at those facilities, and it remains one of the four areas where ASX falls short. Jones's comment that ASX is "still not meeting the RBA's expectations in several important areas" captures both sides of the picture: some movement in the right direction, but a gap that remains.

Why the RBA watches market infrastructure so closely

Clearing and settlement facilities sit at the centre of the financial system. If they fail, the consequences can spread well beyond the firms directly involved. That is why the RBA treats their resilience as a financial stability matter.

The RBA's broader stability assessment reinforces the point. The Financial Stability Review released on 1 October 2026 listed disruptions at critical service providers among the elevated threats to financial stability, along with geopolitical tensions, global market vulnerabilities and AI. That list is framed in general terms rather than about ASX specifically, but the theme is the same: when an essential service provider stumbles, the effects can be system-wide.

Market conditions add to the relevance. The minutes of the RBA's September 2026 Monetary Policy meeting noted that Australian equities fell about 5% since the previous meeting. Volatile markets place greater demands on the infrastructure that processes trades, which is one reason robust clearing and settlement matters most when conditions are least calm.

Jones himself has also highlighted risks in markets. Speaking at the Super and Wealth Summit on 26 October 2026, he said "there is a lot of good news priced into parts of the capital markets." That comment concerned valuations rather than ASX's systems, but it underscores why the RBA wants market plumbing to be dependable if sentiment turns.

Infrastructure oversight beyond the ASX

The ASX assessment is one example of a wider pattern in the RBA's work on critical systems. Under the Cash Distribution Framework Act 2026, Linfox Armaguard was designated on 3 September 2026, bringing a key part of Australia's cash distribution network within a formal framework. In payments, Ellis Connolly, the RBA's Head of Payments Policy, observed at the Australian Finance Industry Association on 20 October 2026 that "you can have situations where you can end up being as exposed as the weakest point in the network".

That remark was made in a payments context, but it applies equally well to market infrastructure. A clearing and settlement system is only as strong as its weakest link, which is why standards like Governance and Operational Risk carry such weight.

For investors, the assessment does not, on its own, signal anything about the value of shares or the safety of individual holdings. It is a judgement about how ASX's facilities measure up against regulatory standards. Readers with questions about their own investments can consider speaking with a licensed adviser.

The bottom line

The RBA's 23 September 2026 assessment kept ASX on notice. Four standards, Governance, Comprehensive Management of Risks, Credit Risk and Operational Risk, were rated "partly observed" at one or more facilities. ASX Clear and ASX Settlement did improve on Operational Risk, moving up from "not observed" after CHESS improvements that followed the December 2024 batch settlement incident. But as Brad Jones put it, ASX "is still not meeting the RBA's expectations in several important areas." The next assessment will show whether the progress continues.

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