Australia's ASX has acknowledged making misleading public statements regarding its long-troubled CHESS software upgrade and consented to a penalty of A$20.5 million ($14.50 million), pending Federal Court approval.
The Australian Securities & Investments Commission (ASIC) initiated legal action against ASX in August 2024, contending that statements released in 2022 about the previous Clearing House Electronic Subregister System (CHESS) initiative—scheduled to launch in 2023—contained false or misleading information. By the latter part of 2021, ASX had internally flagged the project with a "red" status, indicating significant delivery risks. A week prior to ASX's February 2022 trading update, the audit and risk committee was briefed on this concerning status.
In its February 10, 2022 market announcement accompanying then-CEO Dominic Stevens' retirement decision, ASX characterised the replacement project as "progressing well". ASX subsequently abandoned the original CHESS initiative in November 2022 following persistent technical difficulties and substantial expenditure on remedial reviews. The revised system commenced initial deployment in April, with full completion targeted for 2029.
The settlement also requires ASX to contribute A$3 million toward ASIC's legal expenses. Both amounts will be recorded as significant items in the company's fiscal 2026 accounts. ASX shares gained 2.6% to A$50.46, outperforming the broader market's 1.3% increase. Market analyst Kai Chen of MPC Markets noted that while the financial resolution concludes the legal dispute, questions about the exchange's institutional culture and governance approach remain unresolved.
