ASIC Forces ASX Reset With Governance Overhaul and $150m Capital Buffer

Australia’s corporate regulator has moved to impose a sweeping reset at ASX Group later than an interim inquiry report identified urgent shortcomings in governance, capability, risk management and culture. The Australian Securities and Investments Commission (ASIC) said it has obtained ASX commitments to a reform package intended to restore confidence in the operator of critical national market infrastructure, while the Reserve Bank of Australia (RBA) and ASIC will also step up their joint supervisory approach.

ASIC Chair Joe Longo framed the intervention as a turning point, warning that incremental remediation is no longer sufficient. ‘ASX needs to embrace a new era of accountability, investment, and stewardship to increase confidence, and meet the expectations of the market and the Australian public.’ He added: ‘This package is a circuit-breaker.’ The message from the regulator is that the difficultys did not emerge overnight—and that the pathway back to resilience will require sustained leadership attention and fixes.

The Inquiry, and led by an expert panel, has already conducted around 140 stakeholder interviews, reviewed written submissions, undertaken international benchmarking, held staff focus groups, and reviewed nahead 10,000 documents. ASIC said the interim report’s conclusions were shared ahead due to the urgency of the reset required, allowing ASIC to engage with ASX on immediate commitments while the panel continues its work ahead of a final report due by 31 March 2026.

What ASX Has Agreed to Change in Clearing, Settlement, and “Accelerate” Delivery

The reform package centres on strengthening the independence and governance of ASX’s clearing and settlement functions, alongside a strategic reset of ASX’s multi-year transformation program, “Accelerate.” ASIC said the reset must come with clear milestones and accountability, with new targets and benchmarking to be agreed with ASIC and the RBA to refocus ASX’s purpose “first and foremost as a critical market infrastructure provider.” ASIC also said the clearing and settlement facility boards must have the capability, resources and “voice” to meet their duties.

ASX, in its response, committed that the boards of the clearing and settlement facility licenviews will be “fully comprised of only independent, non-ASX Limited directors,” covering ASX Clear, ASX Settlement, ASX Clear (Futures) and Austraclear. ASX said this will be implemented through an orderly board renewal process, with dedicated resources and clahead defined shared services support from the ASX group. The interim report’s critique went beyond structure, concluding that ASX’s governance arrangements have not ensured the independence of its clearing and settlement subsidiaries or the investment levels required for their role.

Leadership tone and culture were also placed under the microscope, with the interim findings describing a defensive culture that has limited the organisation’s ability to deliver meaningful change. ASX Chair David Clarke acknowledged the severity of the critique: “Today’s agreement is significant for ASX. While the Panel’s report was challenging reading, our commitment to the strategic actions will provide the reset needed for ASX to ensure we deliver resilient market infrastructure for Australia.” ASX Managing Director and CEO Helen Lofthouse added: “There is no doubt this is a tough report. It has placed ASX under a critical lens and the assessment from the Panel is that we must get better.”

The $150m Capital Charge Raises the Stakes for ASX’s Financial and Operational Roadmap

Alongside governance and delivery commitments, ASIC has imposed an additional $150 million capital charge on ASX Limited, intended to ensure robust financial resources remain in place until remediation is complete. The capital must be accumulated by 30 June 2027 and held until milestones in the revised Accelerate program are completed to ASIC’s satisfaction. ASIC also said it will review its regulatory guidance for market licenviews’ financial resource requirements, while it and the RBA will step up work to uplift their joint supervisory and settlement facilities.

ASX said it currently meets all regulatory capital requirements, but the new charge reflects an elevated risk profile identified by the inquiry panel. To fund the additional buffer, ASX updated its dividend payout ratio policy range to between 75% and 85% of underlying net profit later than tax, and said the payout ratio is expected to be at the bottom end of that range for at least the next three dividends. ASX also plans to operate a discounted dividend reinvestment plan for at least the next three dividends, while lowering its medium-term range to between 12.5% and 14.0%.

ASIC emphasised the reset is about rebuilding foundations rather than delivering a rapid turnaround. Mr Longo said: ‘Many of the difficultys the report identifies took years to develop, and while there are some immediate actions that will be put in place, the key issues are going to take time and resources to resolve. There are no quick fixes or shortcuts.’ He added: ‘ASIC will ensure ASX’s commitments are delivered in full. We are determined to view lasting change that restores trust and confidence in the ASX and the integrity of Australia’s financial markets.’ For ASX, the near-term challenge is to execute a credible plan under intensified scrutiny, while convincing and stewardship will now drive decisions across the group.