The primary outcome was to ensure that there was accountability and oversight for the rollout of the new CHESS replacement program, which goes live in 18 months.

The regulator flirted with looking at a court-based outcome - but believed it wouldn’t solve the issue. ASIC’s solution involves the imposition of additional licence conditions including installing an independent expert to oversee the ASX’s new CHESS trading platform.

The range of measures will also place more governance responsibility on the board and executives of the publicly listed ASX Ltd that will ensure they have remuneration-based accountability.

But that only deals with part of the problem.

The other feature of ASIC’s response is to place some pressure on those that use the exchange - the market participants like brokers and big investors - to get their houses in order.

This is because the damage wrought by the ASX outage last November was greatly exacerbated by the IT-based inability of market participants to divert trades to another exchange.

Had traders been able to switch to another exchange the damage would have been significantly mitigated. And ASIC wrote to all the brokers on Wednesday letting them know that they will need to raise their spend on IT - an amount that Longo believes would be quite ‘significant’.

However, this won’t do anything to address the wider structural problem of the marketplace that Australia has one very dominant exchange player - the ASX.

There are views that the monopoly-like returns that the ASX enjoys are higher than most exchanges around the world and the lack of competition has allowed it to underinvest in technology - which in turn contributed to the outage last year.

Longo takes a different view.

“Would the market be better off if we had three or four exchanges? I suppose that might be nice to have but at what cost? The technology required and the investment required to run an exchange like ASX is pretty significant.”

“If we want world-class technology in a market of our size, we have to be realistic about how many players have got the capacity to do that” Longo believes.

So, he says that a dominant player in a market our size is the structural reality that can only be dealt with using regulation. And he reckons that between ASIC, the Reserve Bank of Australia and the Australian Competition and Consumer Commission, the ASX already operates with a lot of regulatory masters.

But that doesn’t solve for carelessness, especially the sort that shut the market down last November.

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