ASIC launches official investigation into ASX market outage

• The ASX has confirmed today it is officially under investigation from the Australian Securities and Investment Commission (ASIC) after last week’s full-day outage
• The market crashed on Monday last week after just 24 hours and wasn’t back online until Tuesday morning
• Then, on Tuesday, the ASX flagged some issues with its Centre Point anonymous matching system which meant Chi-X bids and offers could not be used
• ASIC raised concerns about both of these issues last week, with ASX confirming an official investigation this morning
• Shares in ASX are currently down 0.38 per cent, worth $79.70 each at midday AEDT

The ASX has confirmed today it is officially under investigation from the Australian Securities and Investment Commission (ASIC) after last week’s full-day outage.

The corporate watchdog initially flagged its concern last Monday when the ASX crashed after just 24 minutes of trade and didn’t open until Tuesday morning. At the time, ASIC said the outage was a “significant concern”.

It seems a major update to the ASX Trade system caused the outage. ASX Trade is the trading platform for the ASX’s equity market.

However, ASIC had some more concerns the following day when the ASX revealed some problems with its Centre Point anonymous matching system. Essentially, the system acts as a dark order matching service within the ASX Trade system.

The issues with the system meant Chi-X bids and offers could not be used. As such, ASIC said it was actively assessing ASX’s compliance with its market licence obligations.

“ASIC is concerned that there have been further issues with infrastructure at ASX and is working with stakeholders to ensure that any impact on the fair, orderly and transparent operation of the markets is minimised,” the corporate watchdog said in a statement last week.

While ASX said today it has pinpointed the issue with Centre Point and the system it will be back up and running on Tuesday morning, the share market operator said ASIC has launched an official investigation into Monday’s outage.

“ASIC has confirmed to ASX that it is conducting an investigation into the ASX Trade outage on Monday 16 November 2020,” the ASX said in a market announcement, which was marked as non-price-sensitive.

“ASX acknowledges that this is appropriate given ASIC’s regulatory oversight,” ASX said.

“ASX takes its obligations very seriously and will cooperate fully with ASIC,” it continued.

The day of the market outage, ASX Managing Director and CEO Dominic Stevens apologised to investors and market users for the failure.

“The outage falls short of the high standards we set ourselves and the standards others expect of us,” Dominic said at the time.

Nevertheless, he said the tech upgrades will continue as the ASX works to modernise its tech.

“While I am disappointed with today’s outage, we are determined to continue our program of contemporising ASX’s technology stack from top to bottom,” he said.

“This initiative is critical to ASX building an exchange for the future and ensuring we best serve the needs of our customers and the Australian market,” the CEO concluded.

Shares in ASX are down 0.38 per cent today, worth $79.70 at 1:55 pm AEDT.