ASIC Inquiry and Risk Failures Cast Shadow Over ASX’s Strong FY25 Results
ASX Limited reported a robust FY25 with revenue and underlying profit growth, while navigating regulatory scrutiny following a major settlement incident. The company advances its technology transformation and sustainability agenda as it seeks to rebuild trust and deliver shareholder value.
- Operating revenue up 7.0% to $1.11 billion
- Underlying net profit after tax rises 7.5% to $510 million
- ASIC launches inquiry following December 2024 CHESS Batch Settlement Incident
- CHESS Replacement project on track for Q4 FY26 Release 1 go-live
- Board restructures committees and applies remuneration discretion amid risk concerns
- Sustainability progress includes net zero Scope 1 and 2 emissions and ESG product development
Strong Financial Performance Despite Challenges
ASX Limited delivered a solid financial year in FY25, with operating revenue increasing 7.0% to a record $1.11 billion and underlying net profit after tax rising 7.5% to $510 million. The company declared a fully franked final dividend of 112.1 cents per share, bringing total dividends for the year to 223.3 cents, up 7.4% from the prior year. These results underscore the resilience of ASX’s diversified business portfolio across Listings, Markets, Technology & Data, and Securities & Payments.
Regulatory Scrutiny and Operational Risk Management
However, FY25 was not without its challenges. The December 2024 CHESS Batch Settlement Incident, which disrupted settlement processes, triggered heightened regulatory scrutiny. The Australian Securities and Investments Commission (ASIC) initiated a wide-ranging inquiry into ASX’s governance, risk management, and operational resilience frameworks. This inquiry, led by an independent expert panel, is expected to report by March 2026. ASX has committed to full cooperation and transparency throughout the process.
In response, ASX launched the Accelerate program to intensify efforts on operational risk management, technology resilience, data governance, and cultural transformation. The Board restructured its committees, splitting the former Audit and Risk Committee into dedicated Risk and Audit and Supervision Committees to enhance oversight. Reflecting the seriousness of the risk management issues, the Board exercised discretion to reduce short-term variable rewards for executives, with the CEO voluntarily forgoing her FY25 short-term incentive.
Technology Modernization and Strategic Progress
ASX continued to advance its five-year transformation strategy, with significant progress in its technology modernization agenda. The CHESS Replacement project, a critical infrastructure upgrade, remains on track for Release 1 go-live targeted for Q4 FY26. Other milestones include upgrades to the OTC Clearing system and enhancements to cash market trading platforms, such as the move to a single opening auction and introduction of a post-close trading session.
These initiatives aim to improve market quality, operational resilience, and customer experience. Despite the operational setbacks, ASX reported strong revenue growth in Markets, Technology & Data, and Securities & Payments, driven by increased trading volumes and demand for data and connectivity services.
Sustainability and Market Leadership
ASX also made notable strides in sustainability, achieving net zero Scope 1 and 2 emissions for FY25 through renewable energy sourcing and carbon offsetting. The company is expanding its ESG product suite, including the launch of physically deliverable Environmental Futures contracts to support the energy transition and carbon risk management. ASX’s sustainability framework aligns with the United Nations Sustainable Development Goals and incorporates climate scenario analysis to assess physical and transition risks.
In addition, ASX is actively engaging with market participants and regulators to enhance governance standards and listing rules, aiming to foster a vibrant and trusted public market ecosystem. The company’s educational initiatives, such as the ASX Sharemarket Game and Investor Days, continue to promote financial literacy and investor engagement.
Governance and Board Renewal
The ASX Board saw changes with the appointment of Anne Loveridge AM in July 2025, bringing expertise in risk, audit, and financial services governance. Planned retirements of long-serving directors Peter Nash and Melinda Conrad are set for later in 2025. The Board emphasizes strong governance as foundational to restoring confidence and delivering long-term shareholder value.
ASX’s underlying return on equity improved to 13.6%, within the company’s target range, supported by disciplined expense management and capital allocation. The company’s total shareholder return for FY25 was 20.3%, reflecting both dividend payments and share price appreciation.
Bottom Line?
ASX’s FY25 results highlight robust financial health amid regulatory challenges, with the coming year pivotal for risk remediation and technology delivery.
Questions in the middle?
- How will the ASIC inquiry findings influence ASX’s governance and operational practices?
- What are the risks to the CHESS Replacement project timeline and budget as Release 1 go-live approaches?
- How effectively will ASX’s Accelerate program improve operational risk management and restore market confidence?
