The Australian Securities and Investments Commission (ASIC) has welcomed the establishment of an ASX Advisory Group and the appointment of Alan Cameron as its independent chair.

The new entity will advise on ASX Clear and ASX Settlement, which are both co-regulated by ASIC and the Reserve Bank of Australia (RBA), on strategic clearing and settlement issues, including its future input into the governance of the longstanding industry concern over the ASX CHESS replacement project as well as the adequacy of ASX’s stakeholder engagement and governance, including ASX’s management of intragroup conflict of interests.

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.

“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,” ASIC Chair Joe Longo said.

He added that ASIC was 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.

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

In June, ASX released a formal statement in which it denied a decision on its CHESS replacement partner.

This piece was first published in FST’s sister publication, Financial Newswire.