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

The Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term system board of the Reserve Bank of Australia (RBA) raised concerns over recent trading issues at the Australian Securities Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term (ASX). Earlier this week, ASX investors almost lost 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.

ASX is planning to replace its current trading system CHESS by 2023, but the recent trading issues have forced the payments system board of 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, 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 outlined the 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.