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How Regulators Allowed ASX's Technology Failure

How Regulators Allowed ASX's Technology Failure

by Starling Insights

Starling Insights Editorial Board

May 01, 2024

Observations

The Australian Parliamentary Inquiry into the Australian Stock Exchange's (ASX) long-delayed and over-budget replacement of its settlements system has issued its final report. The Inquiry uncovered systemic failures in oversight and accountability by the Australian Securities & Investments Commission (ASIC) and the Reserve Bank of Australia (RBA). 

The report comes 17 months after ASX's long-planned replacement of its aging Clearing House Electronic Sub-register System (CHESS) with a novel blockchain-based system failed, resulting in a $250 million write-down. The report, which provided 12 recommendations, stressed the need for more rigorous audits and supervision to prevent such technical failures in the future. "We must ensure that key parties have learned from the failures of the CHESS replacement project thus far, and do everything possible to avoid them happening again," said Senator Deborah O'Neill, who Chairs the Parliamentary Joint Committee on Corporations and Financial Services that conducted the Inquiry.

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