Reserve Bank of Australia Raises Concerns over Trading Issues at the ASX

The payments system board of the Reserve Bank of Australia (RBA), raised concerns over recent trading issues at the Australian Securities Exchange (ASX). Earlier this week, ASX investors lost almost an entire trading session after operational issues affected the trading systems at the exchange.

In an official announcement, RBA mentioned that it will be working with ASX to better understand if there are systematic underlying issues to be addressed. The central bank also emphasized the need for system replacement.

The ASX is planning to replace its current trading system CHESS by 2023, but the recent trading issues have forced the payments system board of the RBA to emphasize quick replacement of the trading system, much earlier than originally planned.

While providing details about ASX’s upcoming project to replace the CHESS clearing and settlement system for cash equities, the RBA said: “The Board discussed ASX’s revised timeline of April 2023 for implementation of the replacement system and confirmed the Bank’s expectations of ASX in relation to the new system.

It emphasized the need for the replacement system to be implemented as soon as this can safely be achieved by ASX and users of CHESS. The Board is concerned about the recent operational issues affecting CHESS and ASX’s trading systems and will be working to understand if there are systematic underlying issues.”

Focus on Technology

In addition to the concerns regarding ASX’s trading issues, the payments system board of RBA also outlined policy regarding large technology-focused companies involved in payment services in Australia. “Large technology-focused firms are increasingly offering payments services and have transformed the payments industry in some emerging economies. The involvement of these firms in payments has the potential to promote a more efficient payments system by delivering services that meet the needs of end-users. But it may also give rise to a range of complex issues for the industry and regulators in the period ahead,” the central bank said.