Australian Stock Exchange Faces Tighter License Conditions After Outage Probe

Australia’s financial regulator imposed additional conditions on three licenses held by the Australian Stock Exchange (ASX) following an investigation on a market outage last year.

The Australian Securities & Investments Commission (ASIC) said in a statement on Wednesday that its investigation found “serious deficiencies” in the exchange’s ability to limit the impacts of the outage.

ASX was forced to stop trading on Nov. 16 last year a few minutes into opening after a software issue caused its trade system to broadcast erroneous market data. Orders were mass cancelled and were only reintroduced on Dec. 21 with limited functionality.

“The ASX outage was a very serious event, exacerbated by subsequent operational issues,” ASIC Chair Joe Longo said.

“The imposition of these license 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,” added Longo.

The ASIC provided a new set of expectations for the ASX that will mitigate future risks from system upgrades which includes having to appoint an independent expert to assess its new computer system, the CHESS Replacement Program, which is due to go live in April 2023.

In a separate statement, ASX reassured that it is currently working on fulfilling the new license conditions and will closely consider the ASIC’s report on its expectations.


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