In brief
- Australia’s corporate regulator has appointed a three-member expert panel to investigate the ASX.
- The inquiry comes after the exchange scrapped its seven-year, $163.1 million blockchain project to replace its CHESS clearing system.
- The panel, led by veteran banker Rob Whitfield, has to deliver its findings to ASIC by March 31, next year.
Australia’s corporate regulator has assembled a heavyweight panel of financial experts to examine the internal operations of the Australian Securities Exchange following a string of failures, including a disastrous $250 million (US$163.1 million) blockchain project that collapsed after seven years of development.
The Australian Securities and Investments Commission (ASIC) announced on Wednesday that it has appointed three panel members to conduct its inquiry into the ASX Group, focusing on governance, capability, and risk management frameworks within the nation’s primary stock exchange.
The panel will investigate core organizational and cultural drivers that contributed to recent compliance incidents, assess whether ASX has adequate capabilities for stable market infrastructure, and examine the group’s financial objectives and accountability frameworks, as per the inquiry’s terms of reference.
Rob Whitfield, former Westpac Banking Corporation CEO of Institutional Banking and current Commonwealth Bank director, will chair the panel.
He brings three decades of banking experience and was awarded the Order of Australia in 2020 for his service to banking and public administration.
Joining Whitfield are Christine Holman, a non-executive director of AGL Ltd and Collins Foods Ltd with 35 years of experience across media, property, and technology sectors, and Guy Debelle, former Reserve Bank of Australia Deputy Governor and current chair of FundsSA.
Failing off-chain
The inquiry follows ASX’s failed blockchain-based CHESS replacement project, which began in 2016 as an ambitious attempt to modernize the exchange’s 25-year-old clearing and settlement system using distributed ledger technology.
After seven years of development delays and cost overruns, ASX shelved the project in November 2022 following a damning independent audit by Accenture that identified “significant challenges with the solution designs.” As a result, the exchange wrote off US$170 million in pre-tax losses.
By May 2023, ASX had officially abandoned blockchain technology entirely.
Project director Tim Whiteley confirmed at the time the exchange would “need to use a more conventional technology than in the original solution in order to achieve the business outcomes.”
The project’s collapse has since triggered legal action, with ASIC suing the ASX last August for alleged misleading statements about the project’s progress.
The ASX had already paid a $1,050,000 penalty (approximately US$684,000) last March for separate compliance issues related to market integrity rules.
Kadan Stadelmann, Chief Technology Officer at Komodo Platform, said that ASX’s failures have “dented investor trust” and highlight the risks associated with over-promising on enterprise blockchain initiatives.
“The exchange has experienced several outages and failed to deliver on a promised blockchain project,” Stadelmann told Decrypt. “Without competition, the ASX has become bloated and ineffective.”
The panel has to deliver recommendations to address any identified shortcomings by March 31, 2026, with ASIC set to publish the report to guide potential regulatory action against the ASX.
The regulator and the exchange did not immediately respond to Decrypt’s request for comment.
Edited by Sebastian Sinclair
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