The final report from an expert panel that was convened to review persistent issues at the Australian Securities Exchange (ASX) endorsed its initial findings and recommendations for reforms at the exchange.
Last year, the Australian Securities and Investments Commission (ASIC) struck an expert panel to conduct an inquiry into the ASX — focusing on its governance, technical capacity and risk management — in the wake of repeated operational failings at the exchange, including a botched upgrade of its clearing and settlement system.
On Thursday, the ASIC published the group’s final report, which echoed an interim report that found the exchange put shareholder returns ahead of investments in critical market infrastructure, that its’ governance failed to prioritize the resilience of market infrastructure, and that cultural change was needed at the exchange, among other things.
Additionally, the final report found that the ASX’s risk management and compliance practices “need to mature to become fit-for-purpose and embedded in business processes” and that the exchange’s execution of its responsibilities to enforce compliance with the listing rules and other requirements needs more attention.
“This report confirms that ASIC’s decision to commission this unprecedented inquiry was the right call,” said ASIC chair, Joe Longo, in a release accompanying the report.
“The further evidence and key observations in this final report support the scale of transformational change required at ASX to deliver on its stewardship of critical market infrastructure,” he added.
The ASIC noted that the ASX has submitted its plan to the regulator, setting out its approach to implementing reforms that were agreed to late last year.
“The market and the Australian public need resilient and reliable market infrastructure. It is now firmly for ASX to ensure its transformation is successful and enduring. This will take time and will require sustained focus on leadership, accountability, investment and stewardship to deliver,” Longo said.
“We will continue to drive the sustained change required to restore trust and confidence in ASX, and we will hold ASX to account to ensure these commitments are delivered in full,” added ASIC commissioner, Simone Constant.
In response to the report’s release, the ASX reiterated its commitment to addressing the inquiry’s findings and adopting its agreed reforms.
“The panel’s final report, like its interim report, is tough reading,” said ASX chair, David Clarke. “It provides a critical lens on where ASX has fallen short and why fundamental changes are required.”
The conclusion of ASIC’s inquiry represents “a key turning point” for the exchange and has “brought into sharp focus the areas that require more reform or greater aspiration,” he added.
The ASX also reiterated its guidance for its financial results — including expectations that its capital expenditure will come in at between A$170 million and A$180 million in fiscal 2026, and between A$160 million and A$180 million for fiscal 2027.