The ASX has been ordered to pay a $20.5 million penalty after the Federal Court found it misled the market over the progress of its troubled CHESS replacement project, with the corporate regulator saying the conduct put confidence in Australia’s financial system at risk.
The penalty followed ASX’s admission that its 10 February 2022 market announcement describing the CHESS replacement project as “progressing well” was misleading. The statement was made despite the project later suffering significant delays, exposing market participants to the risk of financial harm.
The Federal Court also ordered ASX to pay $3 million towards ASIC’s legal costs.
ASIC chair, Sarah Court, said the penalty reflected the seriousness of the misconduct involving a project underpinning Australia’s financial markets.
“Today’s penalty reflects the seriousness of ASX’s misleading conduct about a project central to the stability of Australia’s financial system.
“Listed entities must be accurate and transparent when updating the market on significant projects, particularly where delays and risks have the potential to affect confidence, investment and decision-making across the market.
“For market operators, that responsibility is even greater, given their role in maintaining critical market infrastructure and ensuring confidence in Australia’s financial system,” Court said.
In handing down the decision, Justice Brigitte Markovic said the ASX had failed to meet the standards expected of the operator of critical market infrastructure.
“Given its role, ASX is a gatekeeper for preserving the integrity of, and confidence in, Australia’s financial system and should have been setting a benchmark for accuracy and transparency in its own market disclosures.
“As the operator of critical market infrastructure, [ASX] is expected to adhere to high standards. In light of the contraventions, it fell short of those standards.”
Justice Markovic also said significant penalties were necessary to deter listed companies from making misleading statements about major projects.
“It was also necessary that the market as a whole understands that misleading announcements made by disclosing entities about their operations will be the subject of significant penalties and there is a need to deter other listed entities from making misleading announcements about the progress of significant projects in which they may be engaging, including where the completion of that project involves third parties.”
ASIC launched civil penalty proceedings against ASX in August 2024, alleging it had made misleading statements in market announcements relating to the CHESS replacement project.
On 15 June 2026, ASX admitted the “progressing well” statement breached sections 12DA and 12DB(1)(a) and (e) of the Australian Securities and Investments Commission Act 2001.
The CHESS replacement project was launched in 2016-17 to replace ASX’s Clearing House Electronic Subregister System with a new platform using distributed ledger technology. The system had originally been scheduled to go live in April 2023.
About six weeks after assuring the market the project was progressing well, ASX announced there was a strong likelihood the rollout would be delayed.
The exchange later paused the project in November 2022, writing off approximately $245 million to $255 million in pre-tax project costs.
ASX subsequently announced a revised replacement strategy in November 2023, splitting the new system into two releases covering clearing services and settlement and subregister services.
The first release went live on 20 April 2026.
