ASIC Enforces Three License Conditions On ASX Ltd

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The Australian Securities and Investments Commission (ASIC) disclosed that it has imposed additional license conditions on the stock-exchange operator, ASX Ltd. According to the regulator, the three additional conditions were necessary after findings from its investigation into an outage in November 2020.

The agency contracted a third party to investigate the outage. Findings revealed that the incident led to an update of the traditional platform that wasn’t set to be implemented at the time.

The regulator requires ASX Settlement Pty Ltd and ASX Clear Pty Ltd to appoint an independent expert that will be approved by the regulator. Their job will be to find out if the upcoming blockchain-based replacement of CHESS is suitable for the purpose.

Accordingly, the additional condition requires ASX operations to remediate any underlying issues that resulted in the market outage. Also, the executive senior executives and the board of ASX Ltd will be responsible for the remedial actions

Following the additional license conditions, ASIC expects ASX Ltd to mitigate the risks of a system upgrade. In line with the order, the regulator will be overseeing the CHESS Replacement Program, which will go live in April 2023.

ASIC Noticed Operational Issues On ASX’s Platform

ASIC Chair, Joe Longo commented on the issues necessitating the additional license conditions. “The ASX outage was a very serious event, exacerbated by subsequent operational issues,” he stated.

Joe added that the imposition of the conditions is a confirmation that remedial actions need to be implemented efficiently and appropriately to take care of the operational issues.

AX Ltd stated that the actions of the financial watchdog are to ensure the effective and effective future operations of Australia’s financial market infrastructure. As a result, the company and market participants need to work together in line with the new conditions. This will make sure that vital sources of capital are available to the economy.

Also, the stock market operator says it has extended clarifications on individual accountability and does not have any counterargument against the additional conditions imposed by the regulator.

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