Clearing and Settlement of Cash Equities in Australia

External Audits of ASX’s Compliance with the Regulatory Expectations

In the ‘Regulatory Expectations for Conduct in Operating Cash Equity Clearing and Settlement Services in Australia’ (CFR Policy Statement), there is a requirement for ASX to commit to submitting an annual external audit of its governance, pricing and access arrangements against the Regulatory Expectations.  In the Code of Practice, ASX committed to annually commission an external audit of its compliance with the Regulatory Expectations to be conducted by an independent assurance firm.

External Audit: Year Ended 30 June 2017

This is the first audit of ASX’s compliance with the Regulatory Expectations since the Council of Financial Regulators (CFR) released the Regulatory Expectations in October 2016.  Prior to the release of the Regulatory Expectations, ASX has been subject to an independent annual audit in relation to its compliance with the Code of Practice for Cash Equities Clearing and Settlement in Australia for financial years 2014, 2015 and 2016.

PwC undertook a reasonable assurance engagement in relation to ASX’s compliance with the Regulatory Expectations in accordance with the Australian Standard on Assurance Engagement 3100 – Compliance Engagements issued by AAASB for the period from 12 October 2016 to 30 June 2017.   PwC assessed ASX’s compliance with the Regulatory Expectations by reference to the Compliance Framework developed by ASX, which comprises the ASX Code of Practice and related policies and procedures.

The assurance report sets out PwC’s unqualified audit opinion that “ASX has complied, in all material respects, with the Regulatory Expectations as represented in the Compliance Framework for the period from 12 October 2016 to 30 June 2017.”

PwC have made two recommendations to enhance ASX’s compliance with the Regulatory Expectations:

  1. For ASX to document its procedure to annually review the composition of the business committee; and
  2. For ASX’s Regulatory Expectations Compliance Framework document to be adopted by the respective business owners, and be subject to annual review by Regulatory Assurance and reported to the Audit and Risk Committee.

The Assurance Report on ASX’s compliance with the Regulatory Expectations is available here.

Past reviews

ASX internal review report 2016 is available here.

PwC external review report 2016 is available here.

ASX internal review report 2015 is available here.

PwC external review report 2015 is available here.

ASX internal review report 2014 is available here.

PwC external review report 2014 is available here.