ASIC Commences Proceedings Against ASX for Allegedly Misleading Statements on CHESS Replacement Project
The Australian Securities and Investments Commission (ASIC) has taken legal action against the Australian stock exchange ASX over allegations of misleading statements regarding its clearing and settlement systems replacement project, CHESS.
The project, initially hailed as a groundbreaking innovation in the financial services industry when it was announced in 2016, was ultimately abandoned by ASX in November 2022 after facing years of delays and criticism.
ASIC’s lawsuit specifically targets statements made by ASX in February 2022, where the exchange claimed the project was “on-track for go-live” in April 2023 and was “progressing well.” ASIC alleges that these statements were misleading and deceptive, as the project was not actually meeting its milestones at the time.
Joe Longo, chair of ASIC, emphasized the importance of trust in the integrity of financial markets, stating that ASX’s statements were a “collective failure” by the board and senior executives. He highlighted the significance of the CHESS replacement project as critical national infrastructure for the Australian economy.
ASIC has not yet determined what penalties it will seek for the alleged contraventions, but the legal action underscores the importance of transparency and accuracy in the financial industry. Stay tuned for updates on this developing story.