Australia's ASX has admitted to making misleading statements regarding a troubled software upgrade and agreed to pay a penalty of A$20.5 million ($14.50 million), subject to court approval. The penalty resolves a lawsuit filed by the Australian Securities & Investments Commission (ASIC) over statements made in 2022.
The penalty and admission of misleading statements close a legal chapter for ASX, but ongoing reputational damage and structural questions may persist until the exchange demonstrates improved delivery and cultural reform, according to market observers.
Australia's stock exchange operator, ASX, has admitted to making misleading statements regarding the progress of a troubled software upgrade and has agreed to pay a penalty of A$20.5 million ($14.50 million), pending court approval.
The Australian Securities & Investments Commission (ASIC) had sued ASX in August 2024, alleging that statements made in 2022 about the previous Clearing House Electronic Subregister System (CHESS) project misled the public. The project was originally scheduled for launch in 2023.
According to the ASIC lawsuit, by late 2021, ASX itself had classified the project status as "red," indicating significant risks to its delivery timeline. The exchange's audit and risk committee was reportedly informed of this "red" status a week before a February 2022 trading update.
In a February 10, 2022 announcement, coinciding with news of then-CEO Dominic Stevens' planned retirement, ASX stated that the replacement project was "progressing well."
ASX ultimately shelved the previous CHESS project in November 2022, following repeated failures and substantial expenditure, leading to a reassessment. The first release of the revised CHESS clearing system went live in April, with full completion projected by 2029.
ASX also agreed to pay A$3 million towards ASIC's legal costs. The proposed penalty and costs contribution are expected to be provisioned in fiscal year 2026 and recognized as significant non-recurring items.