ASX CEO & Managing Director, Dominic Stevens
Source: ASX/Twitter
Market Herald logo

Subscribe

Be the first with the news that moves the market
  • A review into the ASX outage last November has found several shortcomings and concluded the trade update which caused the issue wasn’t ready to go live
  • The securities exchange lost almost a full trading session last year when a major upgrade knocked out the stock exchange’s equity trading platform
  • Australia’s financial regulators called for an independent inquiry into the incident, with the review making seven reccomendations
  • It found gaps in the project delivery risk, while issue management and project delivery for the update “did not meet accepted industry practices”
  • The ASX has responded and says it will agree to address the recommendations while also apologising for the disruption to the market

A review into the ASX outage last November has found several shortcomings and concluded the trade update which caused the issue wasn’t ready to go live.

The Australian Securities Exchange lost almost a full trading session last year on November 16 when a major upgrade to ASX Trade knocked out the stock exchange’s equity trading platform.

As a result, Australia’s financial regulators ASIC and the Reserve Bank of Australia called for an independent review into the incident and the ASX’s response.

IBM Australia carried out the review and tabled its findings on Monday, concluding that while the ASX met most standards it fell short in three key areas.

Specifically, it found the trade system was not ready to go live and it wasn’t “reasonable to expect the test plan used would meet the ASX’s near zero appetite for service disruption”.

Commenting on the key finding, ASIC Chair Joe Longo said he was disappointed in the conduct by the stock exchange.

“The independent expert found that ASX met or exceeded leading industry practices in most areas, but the conclusion that the project was not ready for go-live is very disappointing,” Mr Longo said.

The inquiry also noted there were gaps in the “rigour applied to the project delivery risk and issue management process expected for a project of this nature”.

Additionally, the stock exchange’s issue management and project compliance did not meet accepted industry practices.

IBM’s review made seven recommendations in the areas of risk, governance, delivery, requirements, vendor management, testing and incident management.

In response to the findings, the ASX has agree to address the recommendations and also apologised for the disruption to the market.

“Last November’s market outage fell short of ASX’s high standards,” ASX CEO and Managing Director Dominic Stevens said.

“We believed that the software was ready for go-live, as did our technology
provider Nasdaq. Clearly there were issues, which was particularly disappointing given the significant progress we have made on resilience in recent years.

“We acknowledge the findings in the report. It’s pleasing that ASX met or exceeded leading industry practices in most areas. But the report does point to some important areas for improvement and we will address all of its recommendations.”

A separate review by ASIC into whether or not the ASX met its obligations under its Australian Market Licence is ongoing.

More From The Market Herald

" Inflation hits 3.5 per cent, pressure grows on RBA

The Consumer Price Index (CPI) climbed 1.3 per cent in the December 2021 quarter and 3.5…

" Deloitte: Australian business leaders “more concerned than ever before” about climate change

Almost three-quarters of Australian executives see the world at a tipping point for responding to climate…

" Australian investors funnelled pandemic savings into managed funds over 2021: Calastone

Australian investors funnelled record amounts of cash into managed funds over 2021 as pandemic savings worked…

" Tasmania continues to be the best-performing economy: CommSec

Tasmania continues to lead the rankings as the best-performing state economy in Australia, according to the…