ASIC flags possible reform of ASX and its listing
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More news: ASIC chair Joe Longo has flagged that the listing of the ASX on its own exchange could be reviewed as part of a broad review into the market operator.
What they said: Speaking on a media call, Longo said he did not wish to preempt the review and its ultimate findings but acknowledged that "structural reform" may be required to restore trust in the ASX.
"I can't undo history. We have essentially a monopoly. I think the ASX was one of the first market operators in the world to be self-listed. It's quite a unique structure. It's certainly a unique entity within the Australian economy," Longo said, suggesting the review might take a view on that model.
"We have a monopoly operator that's self-listed. That represents a series of historical decisions and it'll be interesting to see whether the outcome of this panel inquiry could lead to some structural reforms."
Longo stressed that the review is about getting to the core of problems at the ASX once and for all.
"With the help of an expert panel, we're going to step back and do a complete holistic review of your operations, of your governance, of your culture, and get to the root causes, rather than this series of interventions," he said.
ASX shares fall, says ASIC inquiry critical to restoring trust
More news: Shares in the operator of the ASX plunged after its leadership said an ASIC inquiry into its governance, capability and risk management frameworks and practices is key to rebuilding trust.
The inquiry follows repeated failures of the ASX’s clearing and settlement facilities and its failed CHESS replacement project.
The numbers: At 10:16am AEST, the share price in the ASX operator had fallen 3.7% to $70.11.
Guidance on total expense growth for FY26 and capital expenditure for FY26 and FY27 did not specifically consider the inquiry or related implications. The potential impact is currently being considered by the ASX, which will keep the market updated.
What they 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,” ASX chair David Clarke said.
“We welcome the opportunity for independent parties to review the work underway and advise on what more we can do.”
ASX managing director and CEO added that the inquiry “will be critical to ensuring our stakeholders can have trust and confidence in the ASX” and committed to providing “all the support required to ensure this inquiry is effective”.
ASIC launches inquiry into ASX over failures
The news: The Australian Securities and Investments Commission (ASIC) will launch an inquiry into the Australian Securities Exchange (ASX) on governance, capability and risk management frameworks and practices.
The context: The inquiry will make recommendations to address any shortcomings or deficiencies and ASIC said it will publish a report of the outcome, which will include next steps.
The inquiry follows repeated failures at the ASX regarding its clearing and settlement facilities and its bungled CHESS replacement project.
ASIC said it would discontinue its investigation of the 20 December 2024 CHESS Batch Settlement failure as the incident would form part of the broader inquiry.
In March, ASIC and the Reserve Bank of Australia wrote in a joint letter that they were “increasingly concerned and deeply disappointed” over the management of operational risk at ASX.
In August, ASIC commenced legal action against the ASX over alleged misleading statements linked to its CHESS replacement program’s schedule.
What they said: ASIC chair Joe Longo said: "ASX operates Australia’s critical markets infrastructure. Investors and market participants deserve to have absolute confidence that ASX is operating soundly, securely and effectively.
"ASIC’s decision to initiate an Inquiry follows repeated and serious failures at ASX.
"ASX is ubiquitous, you simply cannot buy and settle on the Australian public equities and futures markets without relying on ASX and its systems.”
