Australia Stock Market Operator Draws Regulatory Attention, Could Accrue Material Penalty

Australia's stock market operator ASX, Ltd ASXFF ASXFY draws regulatory attention over a troubled rebuild of its trading software.
The Australian Securities and Investments Commission (ASIC) is investigating "suspected contraventions" of laws around continuous disclosure of market-sensitive information, misleading or deceptive conduct, and exercising duties responsibly, Reuters reports citing an ASX statement.
The ASIC investigation covered ASX directors' actions from October 28, 2020, to March 28, 2022, ASX's statement said. On the first date, ASX gave a "go-live" date of April 2023 for the blockchain-based overhaul; on the second date, the exchange said the project was delayed but progressing well.
On Wednesday, CEO Helen Lofthouse called a virtual all-staff meeting and told the 760 employees to focus on their work.
Lofthouse has been the CEO since August 2022 and worked at the company during the investigation period but was not on the board. ASX's Chair and CEO during the investigation period have since left.
The investigation into the stock exchange marks an escalation in the backlash since it pulled a blockchain-based overhaul of its trading, clearing, and settlement system last November.
The ASIC and Reserve Bank of Australia had demanded more thorough reporting on plans to update ASX's 30-year-old software at the heart of the economy.
The federal government wants to break up ASX's monopoly over clearing and settlement.
Under Australian corporate law, companies can face fines of up to A$10.5 million ($7 million) for misleading disclosures. In comparison, company directors can face prison sentences of up to 15 years and fines of up to A$1.1 million.
Experts found it a wide-ranging investigation accruing significant penalties.
Price Action: ASXFF shares closed lower by 2.61% at $42.90 on Tuesday.

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