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ASX Adjusts Dividend Policy Following ASIC's Capital Charge
Understanding the Impact of Regulatory Actions on ASX's Financial Strategy
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The Australian Securities Exchange (ASX) has announced a revision to its dividend payout policy, reducing the ratio to 75-85% of its underlying net profit after tax.
This decision follows the Australian Securities and Investments Commission's (ASIC) imposition of an additional A$150 million ($99.59 million) capital charge on the exchange operator.
The regulatory action stems from an inquiry into ASX's operational shortcomings, including a failed software upgrade and recurring trade-processing issues.
ASIC's review panel criticized ASX for prioritizing short-term profits over its infrastructure responsibilities. In response, ASIC plans to reset ASX's 'Accelerate' program with new risk and performance targets, in collaboration with the Reserve Bank of Australia. ASX also intends to implement a discounted dividend reinvestment plan and anticipates maintaining its payout ratio at the lower end of the new range for the next three dividends. Additionally, the company has adjusted its medium-term return on equity target to 12.5-14.0%.
ASX Chair David Clarke acknowledged the challenges outlined in the report and committed to strategic reforms. Australian Treasurer Jim Chalmers welcomed these actions, emphasizing the urgency of addressing the highlighted issues. Following the announcement, ASX shares declined by up to 5.1%.
For investors, this development underscores the importance of understanding how regulatory actions can influence dividend policies and overall financial strategies of major market players.
Published:Tuesday, 16th Dec 2025 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
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