Australia’s Main Stock Exchange Is Under Investigation for “Serious Failures”

The Australian regulator has opened a broad inquiry into the country’s primary stock exchange, the Australian Securities Exchange (ASX) group, specifically for “governance, capability and risk management frameworks and practices across the group.”

Concerns Over ASX’s Operational Ability

Announced today (Monday), the Australian Securities and Investments Commission (ASIC) has partnered with the Reserve Bank of Australia (RBA) to investigate the stock exchange amid concerns over its “ability to maintain stable, secure and resilient critical market infrastructure.”

Meanwhile, the revelation of the broad inquiry also impacted the exchange's publicly listed stock price. The ASX stock dropped by almost 7 per cent today (Monday).

Although ASIC did not specify the incident that led to the investigation, the regulator was already reviewing the stock exchange for malfunctioning settlement technology in December 2024. The regulator said it would close that investigation and make it a part of the broader inquiry.

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The first serious glitch on the stock exchange happened in 2020 when trading was halted for almost the entire day, which sparked a probe from ASIC.

“ASIC’s decision to initiate an inquiry follows repeated and serious failures at ASX,” said ASIC’s Chair, Joe Longo. “The inquiry provides an opportunity for ASX to bolster market trust.”

ASX Admits Shortcomings

The ASX had an ambitious plan to transform its legacy clearing and settlement software platform into a blockchain-based one in 2017. However, the project deployment faced multiple delays and was eventually abandoned in 2022. The exchange hired India's Tata Consultancy Services the following year to start a staged upgrade of its platform, which is scheduled to deliver the first part in 2026 at an estimated cost between AU$105 million and AU$125 million.

ASIC highlighted that the exchange will continue prioritising the upgrade of its technology despite the ongoing inquiry.

Meanwhile, ASX also acknowledged the inquiry and confirmed the regulator’s decision to appoint an expert panel to examine the frameworks and practices within the stock exchange group.

“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,” said ASX’s Chairman, David Clarke.