Outage that caused trading day cancellation is of “significant concern” to the corporate watchdog.
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ASX Ltd (ASX: ASX)’s nightmare Monday could spill over into Tuesday as the corporate watchdog announced it would examine whether the company met its licence obligations.
The trading day was cancelled on Monday after the ASX could not recover from technology issues understood to have arisen from a systems upgrade.
Late in the afternoon, the Australian Investments and Securities Commission announced that such outages are of “significant concern”.
“The ASX is one of the world’s most active and visible public markets and forms a critical part of Australia’s national economic infrastructure,” stated ASIC.
“Well-functioning financial market infrastructure is critical to the integrity and reputation of the Australian equity market and the trust and confidence investors have in it.”
As such, the commission on Tuesday would investigate whether ASX had met its Australian Market Licence requirements.
“Market licensees are required to operate a market that, to the extent reasonably practicable, is fair, orderly and transparent, and to have sufficient resources (financial, technological and human) to operate the market, including for any outsourced services,” ASIC announced.
ASIC will also examine ASX’s regulatory compliance under the Corporations Act.
Sorry, but upgrades will continue
The watchdog stated it is in regular contact with the ASX, and is focused on a reopening of markets on Tuesday morning in “an orderly manner”.
“In addition to ASIC’s expectations that this outage will be resolved as soon as is possible in a safe manner, ASX will be required to provide a full incident report to ASIC.”
ASX Ltd apologised to the market for the outage while announcing it would reopen at the normal 10am AEDT time on Tuesday.
The company and its technology supplier Nasdaq have found the root cause and a resolution.
“Notwithstanding the extensive testing and rehearsals, and the involvement of our technology provider, ASX accepts responsibility,” said ASX Ltd chief executive Dominic Stevens.
“The obligation to get this right and provide a reliable and resilient trading system for the market rests with us.”
Stevens said the company would nevertheless continue on with its tech upgrades.
“We are determined to continue our program of contemporising ASX’s technology stack from top to bottom. This initiative is critical to ASX building an exchange for the future.”
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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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