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Highlights:
- Legal Action Against ASX: The Australian Securities and Investments Commission (ASIC) has filed Federal Court proceedings against the Australian Securities Exchange (ASX:ASX) for allegedly making misleading statements about its CHESS replacement project.
- Misleading Statements Alleged: ASIC claims that ASX's February 2022 statements about the CHESS project being "on-track" were misleading, as the project was not meeting milestones and lacked a reasonable basis for its progress claims.
- Consequences and Response: ASIC is seeking declarations, penalties, costs, and an adverse publicity order. ASX has acknowledged the proceedings, stated its commitment to addressing the allegations, and emphasized ongoing efforts to support its operations and market confidence.
ASIC Initiates Federal Court Action Against ASX (ASX:ASX) Over Alleged Misleading Statements
The Australian Securities and Investments Commission (ASIC) has launched Federal Court proceedings against the Australian Securities Exchange (ASX:ASX), accusing the exchange of making misleading statements regarding its CHESS replacement project. ASIC's statement alleges that ASX's communications about the Clearing House Electronic Subregister System (CHESS) project were "misleading and deceptive."
The legal action focuses on ASX's February 2022 announcements, which claimed the CHESS project was "on-track for go-live" in April 2023 and "progressing well." ASIC contends that these statements were misleading because, at the time, the project was not meeting its milestones and ASX lacked a reasonable basis for its optimistic claims.
ASIC Chair Joe Longo criticized ASX's management, asserting that their statements undermined trust in market integrity and had wide-ranging consequences. The regulator is seeking declarations, penalties, costs, and an adverse publicity order but is not targeting individual directors or executives.
ASX has acknowledged the civil proceedings and is reviewing the allegations. The company, led by CEO Helen Lofthouse, has cooperated with ASIC's investigation and remains committed to advancing its operations and maintaining market confidence.
This legal action follows ASX's earlier $1.05 million penalty related to compliance with market integrity rules and comes amid increased scrutiny of the exchange's handling of its technology upgrade project.
