Treasurer Scott Morrison puts ASX on notice after meltdown

Scott Morrison is demanding answers to Monday’s stockmarket outage as ASIC starts an investigation.

Treasurer Scott Morrison wants answers from the ASX. Picture: AAP

Scott Morrison is demanding answers to Monday’s stockmarket outage as ASIC prioritises an investigation and the ASX looks to complete its own probe this week.

Mystery still surrounds the exact nature of the glitch that caused markets to trade unaffected for only 22 minutes on Monday, with the ASX broadly revealing that a “hardware issue” was at fault.

The ASX confirmed yesterday it was still examining the cause of the problem, with chief executive Dominic Stevens at the forefront of a review that will deliver public results later this week.

“ASX will also schedule a customer forum next week to discuss the operational impacts, the ­communication process and preventative actions,” the market ­operator said.

The Treasurer said he was awaiting details on just what went wrong as questions are asked as to why the ASX persisted with the open given the issues seen through the morning.

“It was a very serious issue and ASIC will be investigating,” Mr Morrison said.

“They’ll be doing that review and they’ll be reporting back to me on those issues.”

The glitch was the first of significance for the ASX since a four-hour outage on October 27, 2011, although Mr Morrison warned that the market operator’s “very good reputation” offered it little leeway. “These things need to be avoided and we need to determine what caused it,” he said.

The Australian Securities & Investments Commission, which serves in the role as supervisor of market operators, yesterday confirmed that a formal inquiry into the shutdown had begun.

“We will examine the cause and any effects as a priority and as part of our close oversight of market operators,” the regulator said.

“We are concerned any time there is an incident like this on any of our securities markets, as of course are the users of those markets.

“They have a legitimate expectation that Australia’s securities markets perform to the highest standards.”

The activity comes during a period of significant investment in technology by the ASX as it spotted a “once-in-a-generation opportunity to improve how the equity market operates” in 2015.

At the forefront of the developments was a February 2015 ­announcement of an upgrade of all its main trading and post-trade technology platforms over a three to four-year period.

The issues this week are seen as unrelated, with its upgrades so far focused on the derivatives platform and the problems relating to its separate equities platform.

It was business as usual yesterday, as the local market ended marginally higher.

The billions of dollars in lost turnover on Monday are not expected to be recouped.