The chairman of the Australian Securities Exchange said on Thursday a multi-year turnaround project “cannot fail,” while adding that the company’s board would like to see more progress in terms of risk management.
“We’ve made very notable progress in some important areas such as our technology modernisation program … but the board recognises we haven’t advanced as far, or as fast, across all areas of our business,” Chairman David Clarke said.
“This is especially so for operational risk management and resilience and this has been disappointing.”
The company is halfway into a five-year turnaround plan and he said it “cannot fail, cannot be suboptimal”.
The Australian Securities and Investments Commission launched an investigation into the country’s main stock exchange operator in June, stating that it and the Reserve Bank of Australia had concerns about the operational viability of the Australian Securities Exchange.
The investigation escalated tensions between the corporate regulator and ASX that have simmered for years as the exchange has suffered through a botched software upgrade and a series of trade-processing glitches.
In late 2020, a software issue forced the stock exchange to halt trading after opening for the day. The bourse operator had to defer the session’s settlements to the following day.
In addition, ASX’s attempt to revamp its platform software for clearing and settlement with custom blockchain-like technology was abandoned in 2022, six years after it was unveiled.
To fix the problems that have been raised, the company has embarked on a turnaround programme that is seeking to improve the firm’s operational risk management, among other areas.
The company has created a position for a chief transformation officer, who will oversee the programme and report to CEO Helen Lofthouse.
Investments in the turnaround plan will contribute to an increase in costs for ASX, it said. The company said for fiscal 2026, the rise in its total core business expenses – excluding costs related to an inquiry by the domestic corporate regulator – would come in at the upper end of an 8% to 11% range.
ASX also said its board reduced executive compensation, including a 50% reduction in the executive leadership team’s short-term variable reward pool as well as further cuts to roles that are accountable for risk-management issues.
Additionally, Lofthouse has voluntarily chosen to forgo her financial year 2025 short-term incentive.
($1 = 1.5389 Australian dollars)
Reuters
