Australian Securities Exchange Ltd (ASX) chief executive Helen Lofthouse has acknowledged regulatory frustration over the slow pace of reforms, as pressure to restore market confidence following last year’s CHESS system outage continues to mount.
Regulators from both the Australian Securities and Investments Commission (ASIC) and the Reserve Bank of Australia (RBA) have expressed concern after the December 20 failure of ASX’s Clearing House Electronic Subregister System (CHESS), which prevented the completion of batch settlements for the cash equities market due to a memory allocation issue. The settlement had to be cancelled and deferred to the following business day.
“The regulators are clearly not happy with the pace of change at ASX,” said Lofthouse during an investor briefing. “We recognise the need to ensure that stakeholders have trust and confidence in ASX.”
Lofthouse confirmed the ASX has formed a dedicated taskforce to engage with ASIC following the regulator’s announcement of a governance and risk management inquiry into the exchange operator.
“As the operator of critical market infrastructure we recognise the significance of this action by ASIC and we are committed to supporting the inquiry,” Lofthouse said. “This is a wide-ranging inquiry and it will provide an independent and transparent view of the work we have done, and the work we still have to do.”
The ASX’s upgrade of the CHESS platform, first announced in 2017, has faced persistent delays. Last year, the exchange reaffirmed a staged delivery timeline, targeting the first phase for 2026 at a cost of between A$105 million and A$125 million. The second phase is now projected for 2029, with anticipated costs between A$270 million and A$320 million.
ASX has not ruled out further delays or budget blowouts in the project, which has drawn sustained criticism from regulators and industry stakeholders. ASIC last year also initiated legal action against the exchange, alleging misleading conduct related to representations made in 2022 about the CHESS replacement project.