ASX shares tumble after Jim Chalmers taps Cboe; costs blowout under pressure of multiple inquiries
The market operator’s shares plunged by 11 per cent in early trading after Jim Chalmers anointed Cboe as a viable competitor to crack the ASX’s grip on new listings and fan competition.
Investors dealt the ASX a devastating assessment of its prospects competing against a fiercer Cboe for new sharemarket listings, a day after an embarrassing bungle when one of its operators confused TPG Capital for TPG Telecom.
Jim Chalmers intends to facilitate the first credible challenge to the ASX’s dominance since the Sydney Futures Exchange era, which concluded in a merger of the two bourses.
Following a high-level investor roundtable in Canberra hosted by the Treasurer on Wednesday, the Australian Securities & Investments Commission revealed it was close to finalising Cboe’s application and exploring other measures to revive the public market.
The ASX expects to incur additional operating expenses of between $25m and $35m in fiscal 2026 in relation to the ASIC inquiry, announced in June, into its “repeated and serious failures”, it revealed on Thursday.
The company’s shares plunged by 11 per cent in early trading; they were 8 per cent lower at $64.81.
The ASX’s update comes a day after a major incident involving ASX 200 company TPG Telecom, which was “erroneously” linked by the operator to a $651m buyout of ASX-listed group Infomedia by private equity group TPG Capital. The gaffe led to a cancellation of all early trades in TPG Telecom, which also missed a couple of hours of trading while halted to fix the mess.
ASX chief executive Helen Lofthouse on Wednesday sought out TPG Telecom Inaki Berroeta to apologise for the error.
In its update on Thursday, ASX said the costs are being attributed to “increased resourcing, the establishment of a secretariat to manage our response, legal costs, and other internal and external related costs”.
ASX reported operating expenses of $199.6m, including regulatory response costs, for the first half ended December 31. Fiscal 2025 operating expense growth is expected to be at the midpoint of the guidance range of between 4 per cent and 7 per cent. Its fiscal 2026 operating expense growth rate is also between 4 per cent and 7 per cent, and has not been updated after ASIC costings on Thursday. ASX reported total operating expenses of $392.5m in fiscal 2024, which dented its underlying profit.
“We remain committed to our five-year strategy and are focused on our technology modernisation and uplifting operational risk management and resilience,” Ms Lofthouse said.
ASX will announce its annual results on August 14.
On Wednesday, TPG Telecom was market roadkill in the ASX’s latest humiliation after the sharemarket operator confused the telco giant and Vodafone owner with private equity firm TPG Capital.
It got worse for TPG Telecom. Its stock dropped 4 per cent – approximately a $410m wipeout – at the market open after the ASX wrongly identified it as buying Australian software provider Infomedia. The buyer? TPG Capital Asia, an arm of the global private capital giant.
ASIC opened another ASX file; it is already examining ASX’s governance, capability and risk management.
“We are aware of the issue and are engaging with the ASX to understand the root cause of the error, and the impact,” an ASIC spokesperson told The Australian.
The ASX suspended trade in the listed TPG 15 minutes after the market opened and issued a mea culpa hours later.
“This morning our markets announcements office made an error in processing an announcement from Infomedia,” an ASX spokeswoman said.
“The Infomedia announcement stated that it had entered a scheme of arrangement under which private equity group TPG Capital Asia would acquire 100 per cent of its shares. This error meant that TPG Telecom was incorrectly cross-referenced on that announcement.”
That means traders who subscribe to market announcements relevant to TPG were fed the wrong takeover. Infomedia is a listed company.
“ASX moved quickly to address the issue when it became clear there was potential for confusion in the market. Shares in TPG Telecom traded for approximately 15 minutes after the market opened before trading was paused.”
The TPG gaffe is another unwelcome bungle by the ASX, which is already under scrutiny over a series of governance failings to do with its ancient clearing and settlement infrastructure, and is facing an inquiry by the corporate regulator.
TPG shares tumbled to as low as $5.26 before the suspension, and the confusion was compounded by the fact that TPG on Tuesday provided a comprehensive earnings update and declared a $3bn capital return to investors.
ASX cancelled all TPG trades placed before the trade suspension and its shares resumed trading at 12.38pm AEST.
“This issue arose from an inadvertent human error, and I recognise that it has caused disruption for TPG Telecom and its investors,” ASX executive for markets and listings Darren Yip said. “Upon discovery of the error, it was escalated to me and I will be apologising directly to the team at TPG Telecom.
“This mistake shouldn’t have happened, and we are reviewing our internal processes to understand if there are additional safeguards or procedures we could implement to reduce the risk of a similar reoccurrence.”
TPG Telecom was unimpressed and demanded a better explanation of the egregious mix-up.
“This morning, the ASX made a serious error by incorrectly cross-referencing TPG Telecom’s share ticker in a price-sensitive announcement completely unrelated to us,” a TPG spokesman said.
“That unrelated announcement caused confusion among investors, resulting in a sharp drop in our share price.
“While we welcome the ASX’s decision to cancel trades made during this window, we expect a full explanation of how the error occurred and what steps will be taken to prevent similar incidents in future.”
TPG shares finished Wednesday’s session down 5 per cent, even lower than the share plunge caused by the ASX mix-up, while the market operator’s own shares ended the day off 0.9 per cent. While the ASX was licking its wounds, Infomedia had a ripper session: its stock rocketed 27 per cent on the takeover.
Rob Whitfield, Christine Holman and Guy Debelle are members of the expert panel ASIC assembled to interrogate the ASX and make recommendations to the regulator about its shortcomings.
That report will not be available until March 31, 2026.
ASIC discontinued its investigation of the December 20, 2024 settlement failure and folded it into the broader inquiry. It was looking into whether the market operator’s settlements arm broke the law when it was unable to process batch settlements on the third-last settlement day before Christmas.
ASIC last year launched legal action against the ASX relating to the exchange’s epic bungled clearing and settlement upgrade, which was dreamed up as blockchain technology and eventually led to $250m in writedowns as well as the departure of its chief executive and chief financial officer. Instead, it will now use purchased software to reboot the sharemarket’s back office.
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