• ASIC has launched a formal inquiry into ASXs internal operations following the AU$254M collapse of its blockchain-based CHESS replacement project, abandoned in 2023.
  • A three-member expert panel will review ASXs governance, risk management, and institutional capability, led by Rob Whitfield, alongside Christine Holman and Guy Debelle.
  • The investigation will try to uncover structural and cultural failures behind years of mismanagement and assess whether ASX can meet its regulatory and financial responsibilities.

Australias financial regulator has launched a formal inquiry into the ASX Groups internal operations after years of botched upgrades and governance failures, culminating in the collapse of a multi-year blockchain overhaul that burned through more than AU$250M in investors money.

The Australian Securities and Investments Commission (ASIC) announced the formation of a three-member panel tasked with reviewing the exchanges governance, risk controls, and institutional capability. 

Former Westpac executive and current Commonwealth Bank board member Rob Whitfield will lead the review. Whitfield, whos a decorated figure in Australian finance, will be joined by AGL and Collins Foods director Christine Holman and former RBA deputy governor Guy Debelle, who now chairs South Australias sovereign wealth fund, FundsSA.

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All of this comes after ASXs failed attempt to replace its 1990s-era CHESS clearing system with a distributed ledger solution. The project, launched in 2016 with high hopes, ran aground in 2022 after an independent audit by Accenture flagged design flaws and scalability issues, then it pulled the plug later that year, taking a pre-tax write-down of AU$254M. 

By mid-2023, it simply had abandoned the blockchain. Just like that. Project director Tim Whiteley stated back then that the projects intention was to revert to a more conventional technology in future infrastructure plans, whatever that means.

Its been two years now.

Anyway, the ASIC panel will go beyond those technical audits and will try to identify the cultural and structural weaknesses that led to recent compliance incidents (the company barely finished 60% of the software) and evaluate whether ASX is meeting its financial and regulatory mandates.

That panel is expected to deliver a full account of what went wrong and propose reforms to prevent a repeat.

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