ASIC publishes review on concerns over ASX’s November 2020 power outage
23 August 2021 Australia
Image: Victoria
The Australian Securities and Investments Commission (ASIC) and regulators at the Reserve Bank of Australia (RBA) have published an independent review into a power outage at Australian Securities Exchange (ASX).
The power outage occurred on 16 November 2020 after a major upgrade to ASX’s Nasdaq equity trading platform, ASX’s Trade. Regulators view operational incidents of this nature with significant concern.
To examine the issues, the RBA informed the ASX of its expectation that an independent review of the ASX Trade Refresh project be conducted in the first half of 2021.
The independent review was carried out by IBM Australia Limited upon request of the RBA.
As part of the review, IBM reported several key shortcomings in the project including factors that suggested “the ASX Trade system was not ready to go-live even though the formal implementation readiness processes were completed and verified by multiple parties without objection to go-live”.
IBM also found there were “gaps in the rigour 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”.
However IBM did find that ASX’s business case development and project change management “exceeded accepted practices and the project was provided with and had access to sufficient financial, time, people and technological resources at all stages of delivery to meet its objectives”.
IBM added that communications with key stakeholders were “appropriately managed, and
incident management actions taken by ASX were appropriate during the power outage”.
Dominic Stevens, CEO of ASX has apologised for the disruption caused by the outage and taken responsibility for strengthening ASX’s operational resilience.
He comments: “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.
He adds: “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.”
IBM says it will consider the independent review, including the recommendations and ASX’s formal response.
ASIC is also undertaking a separate investigation into the ASX Trade outage to determine whether ASX met its obligations under its Australian Market Licence, which is ongoing.
Joe Longo, chair of ASIC says: “The independent expert found that ASX met or exceeded leading industry practices in most areas, but the conclusion that the project was not ready for go-live is very disappointing.”
He adds: “ASX has acknowledged and accepted the need for improvement. We do, however, require assurance that these improvements are implemented effectively and result in an overall improvement to ASX’s enterprise wide project management practices.”
The power outage occurred on 16 November 2020 after a major upgrade to ASX’s Nasdaq equity trading platform, ASX’s Trade. Regulators view operational incidents of this nature with significant concern.
To examine the issues, the RBA informed the ASX of its expectation that an independent review of the ASX Trade Refresh project be conducted in the first half of 2021.
The independent review was carried out by IBM Australia Limited upon request of the RBA.
As part of the review, IBM reported several key shortcomings in the project including factors that suggested “the ASX Trade system was not ready to go-live even though the formal implementation readiness processes were completed and verified by multiple parties without objection to go-live”.
IBM also found there were “gaps in the rigour 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”.
However IBM did find that ASX’s business case development and project change management “exceeded accepted practices and the project was provided with and had access to sufficient financial, time, people and technological resources at all stages of delivery to meet its objectives”.
IBM added that communications with key stakeholders were “appropriately managed, and
incident management actions taken by ASX were appropriate during the power outage”.
Dominic Stevens, CEO of ASX has apologised for the disruption caused by the outage and taken responsibility for strengthening ASX’s operational resilience.
He comments: “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.
He adds: “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.”
IBM says it will consider the independent review, including the recommendations and ASX’s formal response.
ASIC is also undertaking a separate investigation into the ASX Trade outage to determine whether ASX met its obligations under its Australian Market Licence, which is ongoing.
Joe Longo, chair of ASIC says: “The independent expert found that ASX met or exceeded leading industry practices in most areas, but the conclusion that the project was not ready for go-live is very disappointing.”
He adds: “ASX has acknowledged and accepted the need for improvement. We do, however, require assurance that these improvements are implemented effectively and result in an overall improvement to ASX’s enterprise wide project management practices.”
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