The notion of the corporate regulator taking on the sharemarket operator in Federal Court is a pretty momentous step.
Already a subscriber?Ouch. Joe Longo says that when the ASX “falls short” of expectations on it as a place to list and invest with confidence, it has wide-ranging consequences across the market.
ASIC has, of course, been targeted regularly by allegations of its own poor enforcement record and lack of litigation appetite over the years. A highly criticalreleased in June lambasted the “deep flaws in ASIC’s approach to investigation and enforcement”. He describes the bungled technology project as one of fundamental significance given it was to replace critical national infrastructure crucial to the operation of the Australian economy.ASIC’s legal focus is the announcement by the ASX in February 2022 that the previously much delayed project was progressing well and on track to go live in April 2023.
The announcement of the lawsuit comes just before the ASX full-year results this week. But Helen Lofthouse, the CEO who inherited the mess in August 2022, knows the excoriating reputational pain will continue indefinitely.“We co-operated fully with ASIC’s investigation and are now carefully reviewing and considering the allegations.”She added the ASX had made strong progress as an organisation over the past two years.
The holes in this guidance clearly also risked undermining confidence in the adequacy of the regulatory scrutiny of ASX assurances – including by the Council of Financial Regulators, comprising ASIC, Treasury, the Reserve Bank of Australia and the Australian Prudential Regulation Authority. That is despite all of them quietly raising their concerns in various meetings.Repeated delays are not unusual in major software upgrades, particularly when using such extraordinary new technology.
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