Published on the 25/06/2026 | Written by Heather Wright

ASIC targets misleading project status claims…

The Australian Securities Exchange will pay a $20.5 million penalty after admitting it mislead the market over the status of its Chess clearing systems replacement system and exposed market participants to risk of financial harm.

The admission relates to a February 2022 market update in which the ASX said the upgrade was ‘progressing well’ despite internal classifications at the time showing significant risks and unresolved issues.

“As market operator and a steward of critical market infrastructure, our words matter.”

Under the proposed resolution, agreed to by the ASX and ASIC (the Australian Securities and Investments Commission), the two organisations will ask the Federal Court to find the ASX breached provisions of the ASIC Act, impose the $20.5m penalty and order ASX to pay an additional $3m towards ASIC’s legal costs. The settlement is subject to court approval and will avoid a trial in proceedings first filed by ASIC in August 2024.

Other allegations of misleading statements – including claims by ASX that the project was ‘tracking to a published plan’ and ‘tracking to go-live in April 2023’ have been dropped as part of the settlement.

At the centre of the case is the Chess (clearing house electronic subregister system) replacement project, a long-running effort to modernise the clearing and settlement infrastructure underpinning Australia’s equities market, with a distributed ledger based platform. The system sits at the core of how trades are processed, settled and recorded, making it critical financial market infrastructure.

ASIC says the ASX misled the market by overstating the health of a project which, internally, was already experiencing significant delivery challenges. The ASX has since admitted that as early as December 2021 the project was no longer on the critical path required to meet its planned April 2023 go-live date. At the time of the February 2022 announcement publicly claiming the project was progressing well, the project was classified ‘red’ internally – denoting significant unresolved issues or risks – and had been at that status since December 2021. Industry test environments had been opened, and others were planned, but were unable to do all that the system had been scoped to do.

About six weeks later, in March 2022, the exchange disclosed that go-live would likely be delayed. The project, which began in 2016 with initial expectations of rollout around 2020, then moving to a planned go-live of April 2023, was subsequently paused and ultimately abandoned after six years work and $245-$250 million in spend.

A review by Accenture in 2022 was scathing, finding significant challenges and deficiencies in the project.

In 2023 the ASX offered $70m in incentives, including rebates on clearing and settlement fees, to encourage brokers to help redesign the system.

Market-wide implications

Sarah Court, ASIC chair, says the ASX’s admission of a misleading statement went to the accuracy of disclosures about a major technology initiative with market-wide implications.

“ASX has admitted to making a misleading statement in relation to critical market infrastructure at the centre of Australia’s financial system,” Court says.

She added that accurate and timely disclosures are fundamental to maintaining trust in Australia’s financial markets, particularly from entities that operate core market infrastructure.

David Clarke, ASX chair, says the settlement reflected the exchange’s responsibility to ensure the market can rely on its communications about major operational programs.

“The market must have confidence in what ASX says about its operations as these statements can be relied upon to make decisions,” he says.

“When we stopped the Chess project in November 2022 to reassess our whole approach, that tested market confidence in ASX and called into question the nature of statements previously made.

“As market operator and a steward of critical market infrastructure, our words matter. I am sorry ASX fell short.”

“Firmer footing” for new system

Clarke says the project is now on a ‘firmer footing’.

ASX interim CEO Darren Yip says Chess remains a ‘critical priority’.

“Just two months ago, the team successfully delivered release 1 of the new system, providing clearing services on a modern, cloud-aligned platform,” Yip says.

That system is based on Tata Consultancy Services’ BaNCS for Market Infrastructure and Quartz Gateway offerings.

Release 1 replaced the clearing component and introduced financial information exchange messaging for trade registration. Release 2, focusing on post-trade modernisation, is targeted to go-live in 2029 and will replace the settlement and subregister functionality, deliver improved corporate action functionality and make further enhancements to clearing. The introduction of global standard ISO20022 messaging interfaces will also be part of release 2.

The case highlights the regulatory scrutiny that can be applied to communications about large-scale tech transformation programs, particularly where those programs underpin core business or market operations.

The Chess replacement project’s scale, complexity and integration across market participants meant delays and performance issues had implications beyond the ASX itself, affecting brokers, investors and other market infrastructure participants.

ASIC says the February 2022 statement exposed market participants to the risk of financial harm, underscoring the extent to which disclosures about technology delivery timelines can affect planning, investment decisions and operational readiness across dependent organisations.

ASIC says it has obtained commitments from the ASX to strengthen oversight, governance and oversight of the replacement program.