Explained: How a $400 million stuff-up is only one of the stock exchange's problems

Australia's stock exchange fell into hot water on Wednesday with an embarrassing mix-up that temporarily cost one business $400 million.

But that human error isn't the only question mark hovering over Australian Securities Exchange (ASX) at the moment, with regulators currently investigating it, and a competitor getting one step closer to reality.

This is what you need to know.

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What happened with ASX and TPG?

On Wednesday, Sydney-based tech company Infomedia announced it was being taken over by international asset manager TPG Capital, which isn't listed on the ASX.

Someone at the stock exchange, though, got their TPGs mixed up, and assigned the takeover to TPG Telecom, which runs a host of telcos including Vodafone, TPG and iiNet.

The ASX put TPG Telecom in a 60-minute timer, pausing trading of its shares, before announcing at 9.47am that was "an internal error, please disregard".

But it didn't go into any detail about that error, and traders were quick to sell their shares of TPG Telecom, assuming it had bought a struggling tech company for no reason.

The ASX then put TPG into a trading halt about half an hour later, and it wasn't until shortly before midday that it publicly explained what had happened.

By then, $400 million had already been wiped off TPG Telecom's value in early trading.

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The $400 million in trades were reversed by 12.30pm, although TPG's shares are currently trading at around $5.25 apiece, almost 25 cents less than they were at the close on Tuesday.

"This issue arose from an inadvertent human error and I recognise that it has caused disruption for TPG Telecom and its investors," ASX markets and listings executive Darren Yip said.

"Upon discovery of the error, it was escalated to me and I will be apologising directly to the team at TPG Telecom.

"This mistake shouldn't have happened and we are reviewing our internal processes to understand if there are additional safeguards or procedures we could implement to reduce the risk of a similar reoccurrence."

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Is that the first time ASX has been in hot water?

No.

In fact, regulator ASIC launched an investigation into ASX less than two months ago, saying it and the Reserve Bank were concerned with its ability to properly run the stock exchange.

"ASIC's decision to initiate an Inquiry follows repeated and serious failures at ASX," ASIC chair Joe Longo said.

Those failures included a number of market outages, including one at the end of 2024 and one in 2020, and a bungled attempt to replace the ASX's aging settlement system, CHESS, which was announced in 2016 but shelved in 2022.

ASIC also launched legal action against ASX last year over what it alleges were deceptive and misleading statements about the CHESS replacement project.

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What happens next?

In an odd quirk, ASX is a company listed on the very same stock exchange it runs.

In trading yesterday, its share price plummeted more than 8.5 per cent – its biggest single-session fall since 2023.

While it came on the back of the TPG error, two other developments played a role.

One was an announcement from ASX that it would incur an extra $25-35 million in costs linked to the ASIC investigation.

The other occurred late on Wednesday, when ASIC announced it was on the verge of approving a second Australian stock exchange, to be operated by a local subsidiary of Cboe Global Markets.

"This move is expected to enhance competition and attract foreign investment, providing more choice for investors and greater international alignment," ASIC said in a statement.

It's not particularly unusual for countries to have several stock exchanges – there's the New York Stock Exchange and the Nasdaq in the United States, and the National and Bombay stock exchanges in India, to name two examples.

But Cboe's approval would end ASX's monopoly on trading in Australia.

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