ASIC today announced an Inquiry into Australian Securities Exchange (ASX) group, focusing on governance, capability and risk management frameworks and practices across the group.
ASX plays a critical role in Australia's financial markets. ASIC and the Reserve Bank of Australia (RBA) have ongoing concerns over ASX's ability to maintain stable, secure and resilient critical market infrastructure.
ASIC's Inquiry will be led by an expert panel that will make recommendations to address any identified shortcomings or deficiencies. ASIC will publish a report of the outcome of the Inquiry, which will inform the next steps it may take.
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.
'The Inquiry provides an opportunity for ASX to bolster market trust.
'The Chairs of the ASX entities, members of the Board, and CEO and CRO have assured me ASX will fully cooperate with the Inquiry and ASIC welcomes this cooperation,' Mr Longo said.
ASIC will discontinue its investigation of the 20 December 2024 CHESS Batch Settlement failure. Consideration of this incident will form part of the broader Inquiry.
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.
Background
ASIC will conduct the Inquiry using existing powers under Section 794C and 823C of the Corporations Act 2001 to assess how well ASX is complying with its obligations as a market licensee and a Clearing and Settlement facility licensee.
The Inquiry may also use the additional powers received through the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024.
The Inquiry panel will be asked to examine the frameworks and practices in relation to governance, capability, and risk management within ASX group.
The composition of the expert panel will be announced in the coming weeks.
The panel will be supported by an ASIC Secretariat, which is expected to include secondees from RBA, Australian Prudential Regulation Authority as well as the Australian Competition and Consumer Commission.
Full details can be found in the Inquiry's Terms of Reference.
The RBA and ASIC are co-regulators of licensed Clearing and Settlement (CS) facilities and have separate, but complementary, responsibilities for the licensing and supervision of CS facilities licensees.
In March 2025, in a joint letter to the ASX, ASIC and RBA expressed increasing concern over the management of operational risk, following the CHESS batch settlement failure incident that occurred on 20 Dec. The expert technical review of CHESS, that ASIC announced on 31 March, will continue alongside the Inquiry.
