A new regulatory report has criticised the Australian Securities Exchange (ASX.AX) for fostering an ‘insular and defensive’ culture. The report, published by the Australian Securities and Investments Commission (ASIC) following a 10-month inquiry, suggests the ASX prioritised delivering higher shareholder returns over ensuring critical market infrastructure was in place. This focus came at the expense of long-term technology upgrades, according to the findings. The ASX operates Australia’s primary securities exchange and provides a range of services including listings, trading, clearing, and settlement. They serve as a central hub for capital markets activity in the country.
The ASIC report, compiled by independent business leaders, stated that the ASX lacked the ambition to be a ‘steward of critical market infrastructure’. Instead, the exchange allegedly adopted short-term ‘tactical solutions’ to address problems, rather than tackling the underlying causes, predominantly related to technology. This approach, coupled with its internal culture, led to a focus on meeting minimum standards instead of striving to excel in its role within Australia’s financial system.
ASX chair David Clarke acknowledged the report’s findings and stated that the exchange has appointed new senior executives and board members to oversee improvements in governance, technology systems, and risk management frameworks. A new chief executive is expected to be appointed following the departure of incumbent Helen Lofthouse next month. Clarke emphasised the exchange’s commitment to addressing the issues raised, noting a substantial increase in capital expenditure to bolster infrastructure resilience and robustness.
Despite these assurances, ASX shares experienced a decline of 0.3% on Thursday, reversing earlier gains of nearly 3%, while the broader S&P/ASX200 index was down 1.1%. In a separate filing, the ASX anticipates a 13%-15% increase in expenses for the 2026 financial year, excluding ASIC inquiry costs. The exchange plans to release a capital expenditure forecast for 2028 and an expense outlook for 2027 by the end of the current financial year.
