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- ASX chairman Damian Roche says outages are a “fact of corporate life” but the securities exchange seeks to learn from experiences “to do things better”
- On November 16 last year, the Australian Securities Exchange lost nearly an entire trading session due to a major update to ASX Trade
- The RBA has released its assessment of ASX’s clearing and settlement (CS) facilities and concluded it enhances Australia’s financial system stability
- However the report noted the ASX will need to prioritise resolving operational risk and margin requirements suggestions
In his first annual general meeting speech as ASX chairman, Damian Roche said outages were a “fact of corporate life” but said the securities exchange would seek to learn from experiences “to do things better”.
On November 16 last year, the Australian Securities Exchange lost nearly an entire trading session due to a major update to ASX Trade, which took out the stock exchange’s equities trading platform.
As a result, Australia’s financial authorities, the Australian Securities and Investments Commission (ASIC) and the Reserve Bank of Australia (RBA) demanded an independent investigation into the event and the ASX’s reaction
The RBA investigation concluded the trading update that triggered the outage was not ready, while ASIC is yet to finalise its report.
Mr Roche said ASX has a reputation for resilience and that all types of organisations across the economy had outages from time to time.
“For example, according to the RBA, the retail payments sector suffered more than 1000 outages during the most recent three-year reporting period,” he said.
“As disappointing as they are, they are a fact of corporate life for those reliant on technology.”
The RBA released its assessment of ASX’s clearing and settlement (CS) facilities have and concluded that it conducted its operations in a manner that enhances overall financial system stability in Australia.
However, the ASX will need to prioritise resolving operational risk and margin requirements suggestions, the report noted.
These recommendations include clarifying lines of responsibility and accountability, and ensuring CS facilities and their regulatory and stakeholder obligations receive attention and focus within the broader ASX group.
All the recommendations will be considered by ASX, the company said and an action plan will be developed, with a focus on the critical areas of governance, operational risk and margining.
“As outlined at ASX’s AGM earlier today, strengthening the technology, cyber security and project management-related expertise of ASX’s board are continued areas of priority,” ASX CEO Dominic Stevens said.
“As is investing in world-leading infrastructure to enhance the reliability and resilience of ASX’s systems, and to unlock innovation for the market.
“The best measure of lower operational risk is a decline in operational incidents. We are achieving this, with incidents and outages declining by almost 90% over the past five years.
“We are determined to deliver the benefits of a new CHESS [Australian Clearing House Electronic Subregister] system, powered by distributed ledger technology, in a safe and timely manner. Any insights from last November’s trading outage, which have not been built into the CHESS replacement project already, will be taken on board.”
