ASIC inquiry to tackle ASX tech "incidents"

Five key technology system "incidents" at the Australian Securities Exchange (ASX) in the past decade has prompted a fresh inquiry by the Australian Securities and Investments Commission (ASIC).

The commission will use the inquiry to collectively examine the 2016 hardware failure in ASX's equity trading system, a November 2020 full-day outage, and the December 2024 CHESS Batch Settlement failure.

CHESS - which stands for clearing house electronic subregister system - is a core system used by the ASX to record shareholdings and manage settlement of trades.

It was meant to be replaced, but a blockchain-based system that the ASX pursued ultimately did not work, forcing the exchange back to the drawing board.

In the inquiry’s Terms of Reference [pdf], ASIC said an expert panel will identify “any core organisational and cultural drivers within the ASX group that have contributed to these incidents”.

It will also determine is ASX has the right organisational capabilities “to provide a stable, secure, and resilient market infrastructure”.

The expert panel will “make recommendations to address any identified shortcomings or deficiencies, including the exchange's technology issues, ASIC 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," ASIC chair Joe Longo said in a statement.

Longo said the Inquiry provides an opportunity for ASX to “bolster market trust.”