The Reserve Bank’s latest clearing-house assessment of ASX Limited is necessary but insufficient: until directors face personal consequences for repeated settlement failures, warning letters will not restore trust in the market plumbing Australians rely on for superannuation and household wealth. Our correspondents reported this week that the assessment weighed on ASX shares while major banks advanced; that market read is rational. Investors are pricing governance risk, not merely IT delay.
We are not asking the RBA to abandon its statutory role. We are asking Parliament and ASIC to stop treating CHESS outages and settlement slips as technical debt alone. When settlement fails, retirees cannot move money, issuers miss raising windows, and confidence in the exchange’s monopoly erodes faster than any software roadmap can repair.
What the facts already show
The November 2023 CHESS outage froze clearing for days, triggering a public apology from ASX leadership and a multi-year replacement program still absorbing capital and regulatory attention. Subsequent incidents—smaller but visible in broker dashboards—demonstrated that resilience is not merely a vendor sprint. The RBA’s assessment process exists precisely because clearing houses are systemic: if they wobble, monetary stability policy cannot pretend markets are frictionless.
Yet accountability has remained institutional. ASX as a corporate entity pays fines, negotiates enforceable undertakings, and publishes remediation timelines. Individual directors rarely face disqualification or meaningful penalty when settlement infrastructure under their oversight fails repeatedly. That asymmetry invites optimism bias in board packs: project milestones green, operational risk red.
The objection—and its limit
Directors will argue they rely on expert executives and regulated project gates, and that punishing non-executive directors could scare talent away from critical infrastructure boards. There is partial truth: boards are not engineers. But the same argument is not accepted for banks after operational failures—APRA’s regime increasingly names responsible managers. Market infrastructure deserves parity, not softer treatment because the logo says “exchange.”
ASIC’s market integrity powers can already pursue officers who fail to manage risk, yet public outcomes rarely match the visibility of outages. Without cases that reach personal liability, the market correctly infers that settlement risk is socialised while upside stays privatised.
What should happen now
First, tie the RBA’s assessment conclusions to explicit director attestation on settlement resilience—not boilerplate in annual reports, but signed statements lodged with ASIC within weeks of any material failure, with criminal false-declaration exposure. Second, accelerate CHESS replacement milestones with independent milestone verification funded by ASX but reported jointly to the RBA and ASIC, so boards cannot hide slippage behind integrated updates. Third, publish a quarterly public dashboard of failed trades, extended settlement queues, and recovery times, anonymised at counterparty level but aggregate enough to shame recurring patterns.
Yesterday’s editorial on renters and rate hikes addressed a different policy lever—monetary transmission through housing. Today’s question is corporate governance at the centre of capital formation. Both demand that public institutions stop outsourcing pain to households while executives keep their seats.
We supported the RBA’s scrutiny when it landed; we will support enforcement when it follows. Without director-level stakes, the assessment is another chapter in a book traders have already read.