ASIC launches fresh inquiry into ASX

ASIC has launched another inquiry into the ASX, this time focusing on its overall governance, capability, risk management frameworks and practices.

The inquiry will be led by a panel that will make recommendations to address any identified shortcomings or deficiencies.

ASIC chair Joe Longo said the decision to initiate an inquiry follows repeated and serious failures.

"ASX operates Australia's critical markets infrastructure. Investors and market participants deserve to have absolute confidence that ASX is operating soundly, securely and effectively," he 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. The inquiry provides an opportunity for ASX to bolster market trust."

ASIC will discontinue its investigation of the 20 December 2024 CHESS batch settlement failure and fold it into the broader Inquiry.

ASIC is currently suing the ASX in the Federal Court for allegedly making misleading statements related to its CHESS replacement project.

"While this inquiry is underway, it is critical ASX continues to prioritise the safe and efficient operation of its infrastructure, including progress towards Release 1 of the CHESS replacement project in mid-2026," Longo said.

ASX chair David Clarke commented: "We acknowledge the seriousness of this action, and ASIC's inquiry will have our full cooperation. 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."

"We welcome the opportunity for independent parties to review the work underway and advise on what more we can do."

ASX managing director and chief executive Helen Lofthouse said: "As the operator of critical market infrastructure we recognise the significance of this action by ASIC, and we are committed to supporting the inquiry. This is a wide-ranging inquiry, and it will provide an independent and transparent view of the work we have done, and the work we still have to do. It will be critical to ensuring our stakeholders can have trust and confidence in ASX."

ASIC will announce who it will appoint to the panel in the coming weeks. It will include secondees from the Reserve Bank of Australia, APRA and Australian Competition and Consumer Commission.

ASIC will publish a report of the outcome of the inquiry, which will inform the next steps it may take.