ASX Faces Scrutiny as ASIC Appoints Expert Panel for Investigation

ASIC Appoints Expert Panel to Investigate ASX Failures

The Australian Securities and Investments Commission (ASIC), Australia's corporate watchdog, has begun a comprehensive inquiry into the Australian Securities Exchange (ASX). This comes after a number of problems, chief among them the failure and eventual collapse of the $250 million blockchain project. To find out whether the ASX encourages strong governance, ASIC has put together a special panel of financial experts to look into the company's internal structure, risk management, and operations.

The panel will look at the main frameworks and systems of the exchange, according to ASIC. This entails assessing the ASX's risk management practices, the strength of its governance framework, and if the personnel is skilled. The review also focuses on understanding the culture inside the organization. ASIC wants to know what led to recent compliance issues and how the exchange sets financial targets and holds itself accountable.

Rob Whitfield will chair the panel. He brings 30 years of experience from banking, including his role as CEO of Institutional Banking at Westpac. At the moment, he serves as a director at Commonwealth Bank. In 2020, Whitfield was also awarded the Order of Australia. Christine Holman and Guy Debelle accompany him. Holman, a director at AGL and Collins Foods, has backgrounds in media, real estate, and technology. Debelle, a former Deputy Governor at the Reserve Bank of Australia, serves as the chair of FundsSA.

Source: X

The Blockchain Project That Failed to Deliver

The investigation comes after a significant ASX failure. The exchange started a project in 2016 to use blockchain technology to replace CHESS, its outdated clearing and settlement system. Introducing contemporary technology into the heart of market operations was the aim. The project had delays and cost overruns over a period of seven years. After significant design faults were discovered by Accenture's independent examination, it was terminated in late 2022.

The ASX suffered after abandoning the blockchain system. Before taxes, the business wrote off $170 million in losses. ASX announced in the middle of 2023 that it was completely abandoning blockchain. In order to suit commercial objectives, they will now employ more standard technology, according to project director Tim Whiteley. That was not the end of the failure. In August 2023, ASIC filed a lawsuit, alleging that the ASX had made false statements regarding the project's status.

This wasn’t the only time the ASX faced penalties. Earlier in March, it paid a fine of more than one million AUD for unrelated market rule breaches. The failed blockchain project has shaken investor confidence. Kadan Stadelmann, CTO of Komodo Platform, said the failure has made investors wary. He pointed out that ASX had overpromised and underperformed. He also cited a lack of competition and frequent outages as reasons for worry.

Source: X

By March 31, 2026, ASIC anticipates that the panel will have finished its work and produced a final set of recommendations. The next actions will be guided in part by these suggestions. If significant problems are discovered, they might also influence future regulatory measures. The public will have access to the report. Investors will benefit from greater openness, and ASX's operations may alter as a result.

An important turning point for the Australian financial system is represented by the probe. It illustrates how even large businesses may be impacted by poor planning and execution. The ASX blockchain initiative's failure offers valuable insights into technology, accountability, and transparent communication. It acts as a warning to investors to be cautious. Authorities have a chance to rebuild trust and prevent similar errors in the future.