ASIC Reveals 4-Year Plan, Focus Will Be on Tech Risks and CHESS Replacement

The Australian Securities and Investments Commission (ASIC) revealed its corporate plans on Monday for the next four years, between 2022 and 2026, highlighting its priorities around the design and distribution of products and technology risks.

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Additionally, the Aussie regulator is going to focus on sustainable finance by “proactive supervision and enforcement” of regulatory standards and on retirement decision-making, which is to protect customers investing in superannuation products.

“The plan identifies work we have underway to address a number of emerging trends and important law reforms that are reshaping the financial system, including digitally enabled misconduct, emerging technologies, climate risks and an aging population,” ASICs Chair, Joe Longo said.

Supervision and Monitoring on ASX

Moreover, the regulator will supervise the Australian Securities Exchange (ASX) in the replacement of CHESS with a blockchain-based solution.

On top of that, ASIC will be monitoring the compliance of two ASX subsidiaries, ASX Clear and ASX Settlement, with additional license conditions that were imposed in November 2021, a year after an outage on the stock trading platform.

“We will also analyze and assess the ASX operating rules changes necessary for the CHESS replacement, and provide ASIC‘s advice to the Minister’s delegate as to whether to disallow all or a part of the changes,” the 31-page long official document stated.

Reporting Changes

The Australian market supervisor is going to align the over-the-counter (OTC) derivatives trade reporting requirements with international requirements over the next two years. It is further going to enhance data aggregation and surveillance capabilities, and effective information sharing.

For enhancing market supervision, the regulator will review artificial intelligence and machine learning practices, risks and controls among market intermediaries. Furthermore, it will bring rules and guidance for automated order processing.

“ASIC is looking to the longer term and planning over the next four years. But, weve seen that scenarios can change quickly. We remain alert to changes and developments in our operating and regulatory environment, and we will continue to make rapid, strategic decisions to adapt where needed. When we do so, it will be transparent,” Longo added.