The Australian Securities and Investments Commission (ASIC) has imposed three additional conditions on three licenses issued to the ASX Group that came in response to the outage of the stock Trading Platform in November 2020.
A third-party investigation earlier found that the November 2020 outage of the ASX resulted from an update of the trading platform that was not ready to be implemented at a production level.
The added conditions will require remediation of underlying issues with ASX operations that led to the market outage. Additionally, the ASX board and senior executives will be accountable for remedial actions.
Furthermore, ASX Clear Pty Ltd and ASX Settlement Pty Ltd need to appoint an independent expert approved by ASIC, who will check if the upcoming Blockchain -based replacement of CHESS is fit for the purpose.
Mitigating Risks of Future Outages
With the latest license conditions, the financial market supervisor is expecting to mitigate any such risk of system upgrades. It will specifically oversee the CHESS Replacement Program that is due to go live in April 2023.
“The ASX outage was a very serious event, exacerbated by subsequent operational issues,” said ASIC Chair Joe Longo. “The imposition of these license conditions will confirm that remedial actions are implemented appropriately and efficiently to address these operational issues, including the critical rollout of the CHESS Replacement Program.”
Additionally, the stock market operator did not oppose any of the conditions imposed by the ASIC and has extended clarifications on individual accountability.
“ASIC’s actions today are all about ensuring the efficient and effective future operation of Australia’s financial markets infrastructure. ASX and market participants must act to ensure that the market can function at all times so that vital sources of capital are available to the economy,” Longo added.
