Wednesday March 13 2019
News Source: Global Exchanges
The Consultation Paper, released on 8th March 2019, seeks stakeholder contribution on ASX’s proposal to update Guidance Notes 1 and 10, to provide contemporary guidance to clearing and settlement participants in relation to their business continuity arrangements and cyber resilience.
The proposed changes to Guidance Note 1 are relevant to participants in ASX Clear, ASX Clear (Futures) and ASX Settlement (other than specialist settlement participants). The proposed changes to Guidance Note 10 are relevant to participants in ASX Clear, ASX Clear (Futures), ASX Settlement (other than specialist settlement participants) and Austraclear (other than collateral manager special purpose participants, foreign currency settlement bank participants and special purpose participants requested for cash only transactions).
Proposed amendments: Overview
Guidance Note 1: For the purposes of s3.5 of Guidance Note 1 for the ASX Clear and ASX Clear (Futures) rulebooks and s3.4 of the ASX Settlement rulebook, the description of a participants “key processes” would now include: its risk management framework, including but not limited to dealing with market risk, liquidity risk, counterparty risk, operational risk and cyber risk; these help to clarify the types of risk that ASX expects a participant’s risk management framework to address and, in particular, to specifically reference cyber risk.
This minor revision seeks to clarify the types of risk that ASX expects a participant’s risk management framework to address and, in particular, to specifically reference cyber risk.
It is ASX’s expectation that a participant’s existing risk management framework should already be designed to identify, manage and mitigate these types of risks and therefore ASX considers that this revision is unlikely to impose any material compliance burden on participants.
Guidance Note 10: sets out a number of key requirements that a participant’s disaster recovery and business continuity arrangements should meet. ASX proposes to enhance Guidance Note 10 to reflect current regulatory and market and, as such, ASX proposes to require participants to:
• maintain up to date high level infrastructure diagrams which represent the current state and, where applicable, future state of the technology and communications infrastructure used to conduct their ASX operations;
• maintain proper records of their key clearing and settlement systems and technology; and
• have a clearly defined system and technology replacement policy which includes a process to identify when assets are nearing their end of life.
All comments on the draft amendments to Guidance Notes 1 and 10 must be made in writing by close of business on 3 Friday May 2019. For more information in relation this article please click on the link above.