The Australian Securities and Investments Commission (ASIC) has launched a formal inquiry into the Australian Securities Exchange (ASX).
The corporate regulator said the probe would assess the ASX’s governance, capability and risk management frameworks and practices.
Chair Joe Longo (pictured) said ASIC’s decision to initiate an inquiry followed “repeated and serious failures” at the ASX.
“ASX operates Australia’s critical markets infrastructure. Investors and market participants deserve to have absolute confidence that the ASX is operating soundly, securely and effectively,” Longo said in a media release.
"[The] 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 its Board, and Chief Executive Officer and Chief Risk Officer assured Longo that the ASX would fully cooperate with the inquiry.
ASIC said the ASX plays a critical role in Australia’s financial markets and ASIC and the Reserve Bank of Australia (RBA) had ongoing concerns about the ASX’s ability to maintain a stable, secure and resilient critical market infrastructure.
The inquiry will be led by an expert panel that would make recommendations to address any identified shortcomings or deficiencies.
ASIC will publish a report on the inquiry outcome, which will inform the next steps it may take.
ASX shares closed at A$72.22 on Friday, up 40 cents on the day and capitalising the market operator at $14.13 billion.
The share price has risen almost 30% over the last 12 months.
