ASIC concludes its investigation into the ASX outage and imposes new license conditions

Just over a year on from the infamous outage at the ASX (ASX:ASX), ASIC has concluded its investigation into Australia’s bourse.

On November 16 last year the ASX traded for just 24 minutes before an outage lasting for the rest of the day. At the time it blamed “market data issues” after it transitioned to a new trading platform.

ASIC launched an investigation into the outage, keen to ensure this does not happen again particularly as the ASX shifts to its CHESS replacement system in April 2023.

Although the investigation is closed and it did not find any breaches of the bourse’s license conditions.

Nonetheless, the regulator has imposed additional license conditions.

These include addressing each of the recommendations of a separate review completed by IBM in August and quarterly reporting on the progress of its implementations.

ASX promises to strengthen its resilience

The ASX did not oppose these conditions imposed by ASIC following last years’ outage.

“We share the determination of our regulators to continue to strengthen market resilience,” said ASX CEO Dominic Stevens.

“The new license conditions are practical and are aligned with the action ASX is taking to improve the way we operate our business.”

“We look forward to working with ASIC to deliver the best outcomes for the Australian market.”

Stevens said outage and incidents had dropped by 90% over the last five years, and added the CHESS replacement system would represent a significant upgrade.

Commenting for ASIC this morning was Chair Joe Longo.

“The ASX outage was a very serious event, exacerbated by subsequent operational issues. The imposition of these licence conditions will confirm that remedial actions are implemented appropriately and efficiently to address these operational issues – including for the critical rollout of the CHESS Replacement Program,” he said.

“ASIC’s actions today are all about ensuring the efficient and effective future operation of Australia’s financial markets infrastructure. ASX and market participants must act to ensure that the market can function at all times, so that vital sources of capital are available to the economy.”