Ann: ASX Query Letters re ISX suspension & termination by Visa, page-164

I agree the disclosure from ISX hasn't been accurate; it hasn't given the market a clear picture of what was going on.

With ASX's probing, was ISX going to 'accurately' disclose to the market its partnership with Visa has been terminated because Visa had investigated and found ISX was introducing excessive risk and had systematic issues with its risk program that not only couldn't be quickly remedied but needed a shift in corporate culture and a complete redesign of the risk programs?

There will certainly be a difference of opinion depending on who you ask. If you ask me I don't think so, particularly if ISX did not agree with those findings. Disclosing this stuff would cause severe damage in the midst of sensitive negotiations, and ISX has stated the Visa issue in itself isn't material enough.

The questions going through my mind on reading this are:

1. What checks were performed before ISX was awarded principal partnership status? Were they inadequate or could a shift in corporate culture creep in that easily under the same management that oversaw the attainment of the principal partnership?
2. Why wasn't a suspension enforced earlier considering the issues had been raised several times in the past? Why was the timing suddenly after the ASX saga began?
3. Why haven't these excessive risks been picked up by the other card schemes?
4. Why hasn't Visa taken similar actions against other financial institutions AUSTRAC has found actually facilitate ML?

There are more questions than answers here.

Also, I see no mention from the ASX these matters have been raised with AUSTRAC. All the ASX seems interested in passing across is that there was inadequate disclosure. Could it be the ASX doesn't strongly believe the allegations are true but just needs a reason to keep kicking its suspension can down the road?