(Reuters) -Shares of Australian bourse operator ASX dropped on Monday after the country's securities regulator launched an investigation into the company, citing "repeated and serious" operational failures.

Shares of ASX were down 4.4% at A$69.58, as of 0044 GMT, on track for their worst day since March 12, if current losses hold. The stock hit its lowest point since April 23.

The Australian Securities and Investments Commission (ASIC) said the probe will focus on ASX's governance, capability, and risk management frameworks, with an expert panel appointed to lead the inquiry, tasked with identifying areas for improvement and recommending corrective measures to address systemic issues.

ASIC will publish the outcome of the investigation, including any next steps deemed necessary.

The ASIC and the Reserve Bank of Australia have concerns about ASX's ability to provide robust and secure market infrastructure, the regulator said.

"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 separate 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.