ASX Settles with ASIC and Unveils New CHESS Roadmap Following Legal Proceedings

ASX Settles with ASIC, Unveils New Roadmap for CHESS Replacement

Sydney, Australia – In a significant development for the Australian financial landscape, the Australian Stock Exchange (ASX) has reached a settlement with the Australian Securities & Investments Commission (ASIC), effectively concluding legal proceedings that arose from misleading statements regarding the Clearing House Electronic Subregister System (CHESS) project.

The settlement comes after ASIC initiated civil proceedings against ASX in August 2024, alleging that the exchange misrepresented the status of its CHESS replacement project in 2022. The ASX admitted to contravening provisions of the ASIC Act, particularly regarding claims that the project was “progressing well.” As part of the settlement, ASX will pay a penalty of $20.5 million and contribute an additional $3 million towards ASIC’s legal costs.

With the legal matters resolved, ASX officials are now focusing on the future. They have announced the launch of the “CHESS Roadmap,” a comprehensive program designed to maintain operations of the current CHESS system until a new solution is fully implemented. This roadmap includes an independent assessment by EY, which will provide six-monthly reports on the implementation process.

David Clarke, chair of ASX, emphasized the importance of transparency and trust in the exchange’s operations. “The market must have confidence in what ASX says about its operations as these statements can be relied upon to make decisions,” he stated. Clarke acknowledged the impact of the previous missteps on market confidence and expressed regret over the situation.

The ASX is moving forward with a replacement solution developed by Tata Consultancy Services (TCS), utilizing their BaNCS Market Infrastructure product. This new system will be implemented in two phases: the first phase, focusing on clearing services, is set to go live in April 2026, while the second phase, which will cover settlement and subregister services, is anticipated to launch in 2029.

As the ASX embarks on this new chapter, officials are committed to enhancing CHESS to ensure its operational reliability and compliance with regulatory standards. The exchange aims to restore trust and confidence among market participants while laying the groundwork for a more robust financial infrastructure in Australia.

For more updates on the ASX and its initiatives, stay tuned.