Appointment of Independent Chair

On 2 August, Mr Longo hosted a roundtable, comprised of a small group of recognised industry leaders, and including ASIC Commissioner Danielle Press and the Deputy Governor of the Reserve Bank of Australia, Michele Bullock.

The roundtable was convened to address longstanding industry concerns over the CHESS replacement project and the adequacy of ASX’s stakeholder engagement and governance, including ASX’s management of intragroup conflict of interests.

During the roundtable, ASX announced the appointment of Alan Cameron AO as Independent Chair of the Advisory Group.

Mr Longo said, ‘ASIC welcomes the appointment of Alan Cameron as Independent Chair to the Advisory Group. Mr Cameron and the Advisory Group will have an important role in assisting ASX to restore trust and confidence in the project.

‘There was a consensus that ASX, the Advisory Group and industry must work collaboratively to achieve the best outcome for the market, for listed companies and investors, and not favour any particular Group’s interests.’

We expect ASX and the Advisory Group to work together in the best interests of the market, including for the replacement of CHESS. The Advisory Group will provide important input to the governance of the CHESS replacement project.

In a letter of expectations to be sent in the coming weeks, ASIC and the RBA will advise ASX of the regulators’ expectations in respect of the Advisory Group. A public response from the boards of ASX Clear and ASX Settlement is expected.

ASIC is prepared to use a range of regulatory options to ensure that ASX Clear and ASX Settlement adhere to the regulators’ expectations with respect to the Advisory Group.

Background

ASIC and the RBA are co-regulators of licensed clearing and settlement (CS) facilities.

The RBA and ASIC have supervisory responsibilities for the four CS facilities in the ASX Group: two central counterparties – ASX Clear Pty Ltd and ASX Clear (Futures) Pty Ltd – and two securities settlement facilities – ASX Settlement Pty Ltd and Austraclear Limited.

The RBA has determined standards for the purposes of ensuring that CS facility licensees conduct their affairs in a way that promotes the overall stability of the Australian financial system. The RBA conducts annual assessments of how well the ASX CS facilities are complying with their statutory obligations to comply with those standards and to do all other things necessary to reduce systemic risk.

ASIC has separate, but complementary, responsibilities for the licensing and supervision of CS facilities licensed under Part 7.3 of the Act. ASIC is responsible for assessing whether a CS facility’s services are provided in a fair and effective way. ASIC also has regulatory responsibilities for operators of licensed markets, including the ASX market. In carrying out supervision and assessments of CS facilities, the RBA and ASIC work closely as appropriate.

More information

• 23-145MR ASIC acknowledges ASX’s release of the CHESS Special Report and Audit Report
• 23-035MR Further ASIC regulatory response on CHESS Replacement and ASX’s program capabilities

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Mr Cameron is a leading corporate governance authority and is the Chairman of the Board of ASX Compliance Pty Ltd, the ASX subsidiary that monitors and enforces compliance with ASX’s operating rules.

He was Chairman of the Australian Securities and Investments Commission, serving from January 1993 to November 2000. He was a director of Sydney Futures Exchange Limited from 2001 and Deputy Chairman from 2003 until its merger with ASX in 2006.

He is currently Chairman of Hastings Funds Management Limited, Westpac’s insurance companies, and National e-Conveyancing Development Limited. He is also Deputy Chancellor of the University of Sydney.

The current Council Chair, Mr Malcolm Starr, ASX’s Executive General Manager, Regulatory and Public Policy, will be leaving ASX after 16 years of service and, as a consequence, will be stepping down from his Council role.

ASX has convened the Council since its inception in August 2002. The Council brings together 21 business, investment and shareholder groups to oversee the principles-based and industry-wide framework it developed for corporate governance. The overriding objective of the Council is to ensure that its principles and recommendations remain relevant and continue to provide a practical guide for listed companies, their investors and the wider Australian community.

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