ASIC’s inquiry will probe a series of technical failures which the regulator believes may have been caused by broader governance issues.

This will include a review of the problematic upgrade of the ASX’s CHESS settlement system.

CHESS, an acronym for Clearing House Electronic Subregister System, is the ASX’s computerized system used to record and manage shareholding investments and transactions.

ASIC has discontinued its investigation into the December 2024 CHESS Batch Settlement Incident.

The incident will now form part of the broader inquiry announced today.

ASIC chair Joe Longo said the review is an opportunity for the ASX to “bolster market trust” following a series of “failures”.

“The ASX manages Australia’s crucial market infrastructure,” stated Longo. “Investors and market participants deserve the utmost assurance that the ASX is functioning efficiently, safely, and reliably.”

“ASIC’s decision to initiate an inquiry follows repeated and serious failures at ASX.

“ASX is ubiquitous, you simply cannot buy and settle on the Australian public equities and futures markets without relying on ASX and its systems.”

ASIC will convene an expert panel for the review and an update will be announced in the coming weeks.

There is no timeframe yet for the completion of the inquiry.

ASX chairman David Clarke acknowledged the ASIC inquiry in a statement to the media.

”We have been working hard on a transformation strategy with several of the initiatives designed to strengthen culture and capabilities, operational risk management, business resilience and technology resilience, but we acknowledge there have been incidents that have damaged trust in ASX,” Clarke said.

“We welcome the opportunity for independent parties to review the work underway and advise on what more we can do.”