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Regulatory

ASIC initiates ASX outage probe

ASIC has officially commenced an investigation into the ASX outage that occurred in late December.

On 20 December 2024, the ASX experienced a "technical issue" on its CHESS Batch Settlement that disrupted and delayed several days' trade settlements. The bourse did not identify the issue until two days after it occurred.

Today, the ASX said it has been notified by ASIC that it has commenced an official investigation into the incident.

Specifically, the investigation relates to the ASX's compliance with section 821A(1) of the Corporations Act 2001.

This particular section of the Act looks at the obligations of clearing and settlement (CS) facilities, including how they manage systemic risks, and whether they have sufficient resources to operate properly.

On January 24, the ASX confirmed the outage had stemmed from its now defunct mFunds system, saying that when mFunds were launched in 2014 the ASX did not identify the need to make certain changes to that specific piece of CHESS infrastructure.

"Although this error remained in the system since 2014, other buffers and parameters within CHESS meant it did not impact system behaviour until specific circumstances in December 2024 caused the system logic to assign insufficient memory to handle the number of users in Batch Settlement for that day," the ASX's Incident Review report read.

At the time, ASIC said it was "deeply disappointed by the incident and the impact it had on the market" and that the ASX has "underlined its expectations for the ongoing resilience, reliability, integrity, and security of CHESS."

"All options are being considered for ASIC's regulatory response to the incident. ASIC is engaging with the RBA and stakeholders on the impact of the incident and lessons for the future," an ASIC spokesperson said at the time.

Read more: ASXASICCHESS Batch Settlement