ASIC Launches Major Investigation Into ASX Over Governance and System Failures

ASX investigation 2025 : The Australian Securities and Investments Commission (ASIC) announced today that it is launching an investigation into the ASX’s risk management practices, operational capabilities, and governance standards, citing persistent concerns about its ability to maintain a “stable, secure, and resilient critical market infrastructure.

The inquiry will examine multiple technical failures, which ASIC suspects may stem from deeper governance shortcomings within the organization.

Focus on Risk Management and CHESS Settlement System

The review will cover the troubled upgrade of the ASX’s CHESS settlement system.

CHESS, short for Clearing House Electronic Subregister System, is the ASX’s platform for recording shareholdings and handling share transaction settlements.

However, ASIC has closed its investigation into the CHESS Batch Settlement Incident that occurred in December 2024.

ASX Faces Scrutiny After Technical and Governance Failures

ASIC Chair Joe Longo stated that the review presents a chance for the ASX to “restore and strengthen market confidence” in the wake of several “significant failures.

As the operator of Australia’s critical market infrastructure, the ASX must ensure it functions reliably, securely, and efficiently. Investors and market participants have every right to expect that,” Longo said.

ASIC’s move to launch the inquiry comes after a series of repeated and serious failures at the ASX.

Given its central role, the ASX is indispensable — participation in Australia’s public equities and futures markets is not possible without depending on its systems.

ASIC will assemble an expert panel to conduct the review, with an update expected in the coming weeks. However, no specific timeline has been set for the inquiry’s completion.

ASX Chairman David Clarke addressed the inquiry in a media statement, acknowledging ASIC’s decision.

We’ve been actively pursuing a transformation strategy that includes initiatives aimed at enhancing culture, operational risk management, business and technology resilience, and overall capabilities,” Clarke said. “However, we recognize that certain incidents have undermined trust in the ASX.

We welcome the opportunity for independent experts to assess our progress and provide guidance on further improvements.