Australian Securities & Investments Commission seeks Federal Court approval for AUD 20.5 million penalty after ASX admits misleading CHESS project disclosure

The Australian Securities & Investments Commission announced that ASX Limited has admitted its 10 February 2022 market statement that the CHESS replacement project was “progressing well” was misleading. ASIC and ASX will ask the Federal Court to find that ASX contravened the law, impose a AUD 20.5 million penalty and order ASX to pay AUD 3 million toward ASIC’s costs. The admission relates to disclosures about a critical market infrastructure project to replace CHESS with a new distributed ledger technology system. ASX admitted that by 21 December 2021 the project was no longer on the critical path to go live in April 2023 and needed to return to it. Between then and the 10 February 2022 announcement, the project was internally classified red, indicating significant unresolved issues or risks. It also admitted that industry test environments had opened, and were planned to open, with reduced scope and performance, while timelines for incomplete work had been pushed out. About six weeks after the “progressing well” statement, ASX announced there was a strong likelihood the go-live date would be delayed. It later paused the project and derecognised approximately AUD 245 million to AUD 255 million in pre-tax project costs. ASIC also noted that it has since obtained commitments from ASX to strengthen oversight, governance and delivery of the CHESS replacement program. The proposed resolution remains subject to Federal Court approval. Justice Markovic has listed a half-day hearing on final orders and penalty for 1 July 2026 at 10:15 a.m., and ASIC said it will issue a further media release once orders are made.