April 2 (Reuters) - Australia's corporate regulator on Thursday flagged governance weaknesses and risk management failures at the country's market operator ASX in its final report following an independent inquiry.
The inquiry panel conducted more than 140 interviews with stakeholders, reviewed submissions, examined an expert technical report into the CHESS settlement system and reviewed more than 10,000 documents, the Australian Securities and Investments Commission said.
The regulator said the final
report's key findings were aligned with its interim conclusions, including that the bourse operator compromised resilience of critical market infrastructure to deliver high shareholder returns.
The panel also found that governance arrangements failed to "provide the necessary focus on critical market infrastructure" and ASX "lacks the aspiration to be a steward of critical market infrastructure."
In additional observations, the panel said ASX's risk management and compliance practices needed to mature and become more deeply embedded within business processes, a lack of which led to the exchange being overly reactive and tactical in its response to incidents and identified gaps.
"The further evidence and key observations in this Final Report support the scale of transformational change required at ASX to deliver on its stewardship of critical market infrastructure," ASIC Chair Joe Longo said.
"This report confirms that ASIC’s decision to commission this unprecedented Inquiry was the right call."
Back in December, the regulator had imposed an additional capital charge of A$150 million on ASX in response to an inquiry launched in June after years of tensions over a failed software upgrade and repeated trade-processing glitches.
(Reporting by Rajasik Mukherjee in Bengaluru; Editing by Leroy Leo and Shreya Biswas)
