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"We’ve made very notable progress in some important areas such as our technology modernisation programme ... but the board recognises we haven’t advanced as far, or as fast, across all areas of our business," Chair David Clarke told the company's annual meeting in Sydney. Sign up here. "This is especially so for operational risk management and resilience and this has been disappointing." The company is halfway into a five-year turnaround plan that Clarke said "cannot fail, cannot be suboptimal". Clarke, who became ASX chairman last year, said the board backed Chief Executive Helen Lofthouse who has come under pressure, especially after a 2024 trading settlement delay. "Helen was hired to fix the problem, she’s hired a management team that has been refreshed over the past couple of years and hired to fix the problem," Clarke told reporters. "They are implementing a board approved strategy, they are 2.5 years into that, we have confidence that the project will be achieved." ASX shares are trading down nearly 12.6% so far this year, as investors weigh the financial impact of the exchange's turnaround plans. The broader S&P/ASX200 index is up 10.7% for the year. The Australian Securities and Investments Commission launched an investigation into the country's main stock exchange operator in June, saying it and the Reserve Bank of Australia had concerns about the operational viability of the ASX. The investigation escalated tensions between the corporate regulator and ASX that have simmered for years as the exchange has suffered through a botched software upgrade and a series of trade-processing glitches. In late 2020, a software issue forced the stock exchange to halt trading shortly after the market open, defering the session's settlements to the following day. ASX's attempt to revamp its platform software for clearing and settlement with custom blockchain-like technology was abandoned in 2022, six years after it was unveiled. Investments in the turnaround plan will contribute to an increase in costs for ASX, the company said. For 2026, the rise in its total core business expenses - excluding costs related to an inquiry by the corporate regulator - would come in at the upper end of an 8% to 11% range, ASX said. ASX also said it had cut executive compensation, including a 50% reduction in the executive leadership team's short-term variable reward pool as well as further cuts to roles that are accountable for risk-management issues. Lofthouse has voluntarily chosen to forgo her 2025 short-term incentive. ($1 = 1.5389 Australian dollars) Reporting by Scott Murdoch in Sydney, additional reporting Sneha Kumar in Bengaluru; Editing by Anil D'Silva and Lincoln Feast.
