Addressing a federal parliamentary committee, Mr Longo said new licence conditions imposed on the ASX stemming from November 2020's market outage created "accountability mechanisms" for its board.

The conditions include the appointment of two independent experts to assess the actions taken to repair the stock exchange after the outage and to oversee the assurance program regarding its replacement CHESS system.

CHESS is the system used to record transactions.

The measures stem from the huge outage on November 16, 2020, when the ASX market was out following a weekend software upgrade. It saw only $567 million in equities traded for the day, compared with the $10 billion average per day in the prior week.

Mr Longo told the committee an independent review by IBM found "quite a few issues where the ASX should have done better", adding it specifically found areas where it "should be more careful".

He said ASIC had considered whether prosecuting the ASX was the correct action, but said it ultimately found it would not have led to the "cooperation and acknowledgement" regarding the new licence conditions.

"I think the time has come for a tightening of supervision and accountability around ASX. In fairness, I think they understand and accept that," Mr Longo said.

Liberal senator Paul Scarr stressed the importance of the ASX maintaining high standards, noting the financial consequences of the outage for market participants across the board.

It was heard the upgrade to the CHESS system was "enormously important" and "will put Australia at the forefront of technology".

Asked by Labor MP Julian Hill if ASIC endorsed the new technology, Mr Longo said that was not the role of his organisation, but noted confidence the correct regulatory framework was in place.

Other conditions imposed will require the ASX to specify individual executive accountability with links to remuneration consequences.

Australian Associated Press