(Reuters) -Australia's securities regulator said on Monday that it has launched an investigation into Australian bourse operator ASX's governance, capability and risk management practices.

The inquiry would be led by an expert panel that will make recommendations to address any identified shortcomings or deficiencies, the Australian Securities and Investments Commission said in its statement.

The regulator added that they would publish the outcome of the probe, including the next steps warranted.

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

"The Inquiry provides an opportunity for ASX to bolster market trust," Longo said.

In a seperate statement, ASX said it had acknowledged the ASIC initiating a probe into the firm.

"We have been working hard on a transformation strategy...but we acknowledge there have been incidents that have damaged trust in ASX," ASX Chairman David Clarke said.

The exchange operator has come under fire for problems with its clearing and settlement platform CHESS, which broke down in December. ASIC took ASX to court last year alleging it had made misleading statements related to its CHESS replacement project in 2022.

ASX had been looking to replace the CHESS software using blockchain-based technology but abandoned the overhaul in November 2022, six years after it was announced, citing concerns about the product's complexity and scalability.