The Australian Securities and Investments Commission (ASIC) has initiated proceedings in the Federal Court against ASX Limited, Australia's largest market operator. The lawsuit pertains to alleged misleading statements made by ASX about its Clearing House Electronic Subregister System (CHESS) replacement project.

ASIC alleges that ASX's announcements on 10 February 2022, stating that the project was 'on-track for go-live' in April 2023 and was 'progressing well', were misleading. According to ASIC, these statements implied that the project was tracking to ASX's announced project plan and was on track to meet future milestones, including 'go-live' in April 2023.

ASIC Chair Joe Longo stated, "'ASX's statements go to the heart of trust in the integrity of our markets. We believe this was a collective failure by the ASX Board and senior executives at the time.'" He further added, "'Its critical importance was all the more reason ASX needed to ensure it told the Australian public the truth about how the project was tracking and whether it would be completed on time.'"

ASIC claims these representations were misleading and deceptive because, at the time of the announcements, the project was not tracking to plan and ASX did not have any reasonable basis to imply the project was on track to meet future milestones.

Approximately six weeks after making the statements, on 28 March 2022, ASX announced that there was a strong likelihood of further delay to the go-live date of April 2023. Following that announcement, ASX engaged Accenture to undertake a review of the project. The review identified significant challenges with the solution design and its ability to meet the ASX's requirements.

Following the release of the Accenture Report, ASX decided to pause the project and wrote down costs of $250 million. ASIC Chair Joe Longo commented on the impact of the delay, "'The delay and subsequent pause of the project in November 2022 caused significant cost to ASX and market participants who relied on assurances as to the progress of the project and scheduled go-live date.'"

ASIC is yet to determine the penalty it will seek for ASX's alleged contraventions. On 7 March 2024, ASIC announced ASX had paid a penalty of $1,050,000 following an ASIC investigation into its compliance with the market integrity rules.