ANALYSIS: ASX pledges derivatives innovation as CHESS legacy lingers
14th August, 2025|Radi Khasawneh
The Australian Securities Exchange (ASX) has pledged to press on with technology and data projects in its growing derivatives business as the group continues to deal with the effects of the group's failed equity back office upgrade.
Speaking as the Aussie group announced full year results on Thursday, the ASX chief executive said the exchange is pressing ahead with its futures and options trading projects despite the ongoing investigation into governance failures linked to the group's defunct CHESS upgrade project.
“We have more new data products which are targeted to launch this year, including our new ASX24 activity product, which went live in July,” Lofthouse said on a call to present results. “We expect that additional products will also launch throughout the 2026 financial year to provide fresh insights into the markets ASX operates.”
As well as the data product launches, the exchange has set up a working group to advise an overhaul of its ASX24 electronic trading system, including refining tick sizes, position reporting and settlement processes for futures and options trades.
ASX on Thursday reported operating revenue of A$1.11 billion (£534 million) for the 12 months to the end of June, up 7% on the previous year.
The performance was led by its markets division, the group's largest segment, where revenue rose 11% to A$349.2 million, including A$262.9 million from the futures and over-the-counter clearing business, up a tenth on the prior financial year.
ASX futures and options volume in the twelve months to the end of June rose a fifth to 195.4 million lots, driven by the rates franchise. Revenue failed to track volume, however, due to a slowdown in higher margin products and ASX’s liquidity incentive programme, according to Lofthouse.
“With the increased volumes, you've got increased volume rebates,” she added. “So we had slower performance in our commodities business in the futures, in the derivatives part of the business, which is typically a higher price point, and big growth in the rates part, which is the lower price point part. So that's the mixed shift.
“With rates growing so significantly, you've got the impact of volume rebates there. But the pricing in particular, the rebates, is certainly an area that the business actively looks at to make sure that those are set appropriately to try and drive the right market quality.”
ASX volumes dipped in July, after a strong first half of 2025, according to the firm. Last month's volume declined 5% year-on-year, to 13.6 million futures and options.
Lofthouse said the market environment remained "supportive" of the rates segment, its largest derivatives market.
ASX's three-year Treasury bond future traded 4.28 million lots last month, according to the Sydney-based group, an 11% decline on July last year, according to FOW data.
Lofthouse identified in August 2023 futures and options as a key opportunity for the firm in her strategic review that included a revamp of the group's failed CHESS settlement system. The exchange last year launched a cost cutting program to offset the ongoing cost of the project.
The Australian Securities and Investments Commission (ASIC) in June launched a compliance assessment of ASX as a market operator, with a wide-ranging remit to assess the exchnage's ability to meet obligations under existing licenses.
ASX has set aside A$25 million to A$35 million to meet the cost of the process in the coming year ahead of the publication of the findings in March 2026.
Lofthouse said the exchange has launched a program to upgrade processes called Accelerate and apologised for persistent issues including a recent mis-attribution in a circular that confused an Australian telco with a US-owned private equity firm.
“The Accelerate programme is a key vehicle driving our operational risk and resilience uplift,” Lofthouse said. “And we'll actively review and refresh this program based on feedback from the inquiry. More broadly, we run critical market infrastructure, and trust and confidence in ASX is a goal we share with all of our stakeholders. I've said previously that our role has always meant that we're subject to scrutiny and that's appropriate.
“We have high expectations of ourselves and the community has high expectations of us, too. Which is why last week's issue relating to TPG Telecom was very disappointing. It demonstrates how an error by ASX can be very disruptive. And we've acknowledged that mistake and apologise to TPG Telecom for the incorrect cross-referencing of their ticker to a market announcement by another company. We're reviewing that incident and making sure that we are learning and improving.”
The ongoing issues have prompted Lofthouse to forgo her short term variable remuneration (STVR) for the past financial year, according to the ASX annual report. The ASX board has exercised discretion to reduce payouts and the STVR pool to 50% of target in the period, according to the report.
