In a hearing of the parliamentary joint committee on corporations and financial services on Friday, Liberal senator Paul Scarr suggested the public release of the report would “give more confidence” to market participants that gaps in the ASX’s technology capabilities were being addressed.
The new chair of ASIC Joe Longo said the release of the report, which was commissioned by the ASX in agreement with ASIC, would be “a matter for them”.
“We are taking it into account as part of our investigation – there are significant parts that are technical in nature and of a proprietary nature and confidential to the operations of ASX,” Mr Longo said.
“But I take your point about transparency, which is why we published the conclusions so people can see where IBM landed and what steps needed to be taken to address the problems.”
The comments come following “market data issues” causing a major outage of the ASX in mid-November last year, after the exchange attempted to roll out its new equity trading platform.
ASIC commenced an investigation into the circumstances around the outage shortly afterwards, however Fairfax Media reports this week suggested the findings of the independent expert report that the ASX had met industry best practice in the majority of technology capabilities would make it difficult to prove the exchange had breached its licence obligations as a market operator.
However, Senator Scarr pointed out that despite its overall positive findings, the report had pointed to shortcomings in the ASX’s technology strategy and questioned whether ASIC communications to the market had glossed over this.
“I was concerned at the language used in the release [of the report] because that sentence ‘overall an independent expert found the ASX met or exceeded industry practice in 58 of the 75 capabilities assessed…’ – isn’t the key finding that the project was not ready to go live when it needed to go live?” he said.
“I can’t argue with that – in fairness all round it was a complex incident where a few things went wrong,” Mr Longo said.
“IBM went in and did a comprehensive review across a range of metrics, there were 75 aspects to their report and that was where they landed on those aspects. But I agree with you that the key thing is that there was an outage and it was a serious outage and it was very disruptive.
“I don’t think any of us are trying to sugarcoat the outcome of the report – it was a measured summary or review of where they landed with their work.”
