The independent expert review into the market outage suffered by the Australian Securities Exchange (ASX) when its system upgrade went live on 16 November 2020 concluded that there was reason to believe the system had not been ready to go-live given ASX’s “near zero appetite for service disruption.” This was the case even though the formal implementation readiness processes were completed and verified by multiple parties without objection to go-live.
In consultation with the market regulator, the Australian Securities and Investments Commission (ASIC), ASX had appointed IBM Australia Limited to undertake the review, with the aim of determining whether the upgrade project met internationally recognized standards or frameworks and relevant securities industry practices.
Overall, the independent expert found that ASX met or exceeded leading industry practices in 58 out of 75 of the capabilities assessed. But the expert made recommendations for improvement in seven key categories: risk, governance, delivery, requirements, vendor management, testing and incident management.
Moreover, the review concluded there were gaps in the rigor applied to the project delivery risk and issue management process expected for a project of this nature. And risk and issue management, project compliance to ASX practices, project requirements and the project test strategy/planning did not meet accepted industry practices.
Dominic Stevens, ASX Managing Director and Chief Executive Officer, said: “Last November’s market outage fell short of ASX’s high standards. We believed that the software was ready for go-live, as did our technology provider Nasdaq. Clearly there were issues, which was particularly disappointing given the significant progress we have made on resilience in recent years.
“We acknowledge the findings in the report. It’s pleasing that ASX met or exceeded leading industry practices in most areas. But the report does point to some important areas for improvement and we will address all of its recommendations.
“ASX is well advanced in developing a detailed response plan for execution over the next 12 to 18 months, and we’ll commission the independent expert to review our actions to meet its recommendations. Our delivery of this program of work will be under the oversight of ASIC and the RBA.”
ASIC has said it expects ASX to apply the insights from IBM’s findings across the ASX Group to ensure existing and proposed projects, including the CHESS replacement program, are managed and implemented appropriately.
