Breaking: Regulator Launches Full-Scale Inquiry into ASX Operations

Australian financial watchdog turns up the heat on ASX with surprise investigation.

Subheader: Exchange giant faces scrutiny amid market turbulence

The Australian Securities and Investments Commission (ASIC) just dropped a regulatory bomb on the country''s primary exchange. No warnings, no gentle nudges—just a full-blown inquiry that''s sending shockwaves through traditional finance circles.

While details remain scarce, insiders suggest the probe could examine everything from trading infrastructure to compliance protocols. Comes just as the ASX was boasting about its "bulletproof" systems—proving once again that hubris is the most expensive line item in finance.

Market makers are already positioning for volatility, while decentralized exchanges quietly sip their coffee watching traditional finance do its regulatory dance. The inquiry''s timing—amid crypto''s relentless march toward mainstream adoption—makes the whole spectacle particularly delicious.

ASIC 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.

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.

Source: ASIC

ASX acknowledges the decision of the Australian Securities and Investments Commission (ASIC) to commence a compliance assessment and inquiry into the obligations of ASX’s market licensees and clearing and settlement licensees under ss794C and 823C of the Corporations Act. To support the assessment, ASIC will appoint an expert panel to examine the frameworks and practices within the ASX Group in relation to governance, capability and risk management.

ASX Chairman David Clarke said: “We acknowledge the seriousness of this action, and ASIC’s inquiry will have our full cooperation. 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.

“We welcome the opportunity for independent parties to review the work underway and advise on what more we can do.”

As part of its five-year strategy announced in 2023, ASX reset its capital management settings to allow for significant investment into its technology modernisation program. As well as the delivery of the project to replace CHESS, this includes upgrades to the cash market trading platform, the replacement of the derivatives trading and clearing platforms and the upgrade to telecommunications networks that provide participants with access to ASX systems.

ASX Managing Director and CEO Helen Lofthouse said: “As the operator of critical market infrastructure  we recognise the significance of this action by ASIC and we are committed to supporting the inquiry. This is a wideranging inquiry and it will provide an independent and transparent view of the work we have done, and the work we still have to do. It will be critical to ensuring our stakeholders can have trust and confidence in ASX.

“Each person at ASX understands the key role we play in the financial system and we will provide all the support required to ensure this inquiry is effective.”

ASIC has informed ASX that in light of these broader actions, it has decided to discontinue its investigation into the December 2024 CHESS Batch Settlement Incident. ASIC stated that consideration of this incident will form part of the broader inquiry. Further information can be found in ASIC’s statement.

ASX provided financial guidance ranges at its Investor Forum on Thursday 12 June for total expense growth for FY26 and capital expenditure for FY26 and FY27. As ASX received notification from ASIC of this action after market close on Friday 13 June, that guidance does not specifically factor in the costs that ASX may incur in responding to, and supporting, the compliance assessment and inquiry, which ASX is currently considering. Should an update to that guidance be required, ASX WOULD keep the market informed in accordance with its continuous disclosure obligations.

Source: ASX