ASX hit with A$150 million capital charge, regulatory reforms

[SYDNEY] Australia’s corporate regulator will impose a A$150 million (S$129 million) capital charge on ASX as part of a package to safeguard the nation’s financial markets amid an ongoing probe into the embattled exchange operator.

The charge will be implemented by Jun 30, 2027, and held until ASX’s remediation efforts are completed, according to an Australian Securities & Investments Commission (Asic) statement on Monday (Dec 15). The exchange operator will also revamp its internal transformation programme with new targets and commit to stronger leadership.

“This reset is about addressing underlying issues, and laying the foundations for a resilient, world-class market operator,” Asic chair Joe Longo said in the statement. “This should be a clear signal to the market that ASX are committed to delivering the transformation necessary for resilient and future-ready national market infrastructure.”

Asic, alongside the Reserve Bank of Australia, has been conducting a wide-ranging probe since June into ASX’s governance and risk management practices. The review stems from a series of technical glitches from a long-stalled upgrade of its clearing and settlement systems.

Earlier this month, a technical outage stopped company statements for hours, adding pressure on chief executive officer Helen Lofthouse to address calls for accountability.

An interim report released by the inquiry’s expert panel found shortcomings in ASX’s governance, capability, risk management and culture that required urgent attention and response. It said the exchange operator’s focus on short-term financial performance and shareholder returns has compromised its obligations to operate critical national market infrastructure.

The probe’s final report is due to be delivered to Asic by Mar 31. BLOOMBERG