Fiscal 2026 expenses seen rising 20%-23%
Six-month unaudited profit up 3.9%
Shares last down 0.2%
Adds details throughout; updates shares
Jan 28 (Reuters) - Australia's main stock exchange operator ASX ASX.AX warned of a sharp increase in annual costs on Wednesday after stepping up investments in technology and risk controls in the wake of a regulatory inquiry into its operations.
The rise in expense growth forecast reflects the costs and additional spending undertaken by ASX to modernise its critical market infrastructure in relation to an inquiry by the Australian Securities and Investments Commission $(ASIC)$.
In December, ASIC imposed an additional capital charge of A$150 million ($105.12 million) on ASX in response to an inquiry launched in June after years of tensions over a failed software upgrade and repeated trade-processing glitches.
ASX now expects its fiscal 2026 expenses to rise between 20% and 23%, compared with the 14% to 19% growth seen earlier.
Its total expenses, including ASIC inquiry-related costs, came in at A$264.3 million for the first half of fiscal 2026, up 20% from the prior year.
ASX has been under regulatory scrutiny over the past few years due to a string of issues, including a naming mix-up in August 2025 and the breakdown of its Clearing House Electronic Subregister System in 2024.
In early December 2025, its announcements platform suffered an outage, forcing about 80 stocks to be placed on a trading halt.
Meanwhile, the country's main stock exchange operator said on Wednesday its unaudited underlying net profit after tax rose 3.9% for the six-month period ended December to A$263.6 million.
Unaudited operating revenue rose 11.2% on the back of growth across all four businesses amid strong volumes for cash market trading, clearing and settlement, and interest rate futures.
Shares of the company struggled for direction, swinging between its highest point in more than a month and its lowest level in over a week. The stock was last down 0.2% at A$53.54.
The company will announce its first-half results on February 12.
($1 = 1.4269 Australian dollars)
(Reporting by Sherin Sunny & Jasmeen Ara Shaikh in Bengaluru; Editing by Subhranshu Sahu)
((JasmeenAraIslam.Shaikh@thomsonreuters.com;))