Share market operator probed after ‘serious’ failures
The corporate regulator’s concerns over critical market infrastructure has prompted a probe into Australia’s stock exchange operator.
Australia’s corporate watchdog will hold an inquiry into governance and risk management at the Australian Securities Exchange after “repeated and serious” failures.
“Investors and market participants deserve to have absolute confidence that ASX is operating soundly, securely and effectively,” Australian Securities and Investments Commission chair Joe Longo said in a statement.
“ASIC’s decision to initiate an Inquiry follows repeated and serious failures at ASX.”
The incidents included multiple breakdowns of the bourse’s decades-old Clearing House Electronic Subregister System (CHESS) settlement system and a breach of market transparency rules in 2022.
The bourse operator has also been under pressure from ASIC and co-regulator the Reserve Bank for ASX’s lack of progress to modernise CHESS and a scrapped plan to upgrade it with blockchain technology in 2022.
An investigation into the failure of the system in December last year will be scrapped and folded in to the broader inquiry.
While the probe was underway, it was crucial ASX prioritised the safe and efficient operation of its trading infrastructure, including progress towards the first release of its CHESS replacement project in mid-2026, Longo said.
“ASX is ubiquitous, you simply cannot buy and settle on the Australian public equities and futures markets without relying on ASX and its systems,” he said.
“The Inquiry provides an opportunity for ASX to bolster market trust.”
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The inquiry panel, to be named in the coming weeks, will be asked to examine the frameworks and practices concerning governance, capability and risk management within ASX group.
The bourse operator’s leadership team acknowledged the seriousness of the inquiry and pledged their full co-operation.
“We welcome the opportunity for independent parties to review the work underway and advise on what more we can do,” ASX chair David Clarke said.
“We have been working hard on a transformation strategy with several of the initiatives designed to strengthen culture and capabilities, operational risk management, business resilience and technology resilience, but we acknowledge there have been incidents that have damaged trust in ASX.”
