ASIC Takes Legal Action Against ASX Over CHESS System Delay

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

On February 10, 2022, ASX had publicized that the CHESS replacement was “on track for go-live” by April 2023. However, subsequent developments painted a different picture, prompting sharp criticism and legal actions from the Australian Securities and Investments Commission (ASIC).

ASIC's complaints arise from reassurances given by the ASX suggesting that the project was "progressing well." Yet, by late March 2022, ASX consulted Accenture, whose findings led to the project's shelving and $250 million in write-offs.

In his statement unveiling the court action, ASIC chair Joe Longo remarked, “There was a collective failure by the ASX board and senior executives.” He underscored that ASX’s promises are vital for trust within the financial markets.

“Companies and investors rely heavily on ASX’s communications regarding their operations to make investment decisions. A breach of confidence at this level induces extensive repercussions across the market,” Longo added.

The legal actions come on the heels of a pre-existing penalty amounting to $1,050,000 paid by ASX after an ASIC investigation scrutinized its adherence to market integrity rules.

Moreover, criminal charges were recently directed at four individuals allegedly involved in a "pump and dump" operation via Telegram, spotlighting ASIC's dedication to regulatory compliance.

The CHESS system, originating in 1994, initially replaced a laborious paper-based clearing approach. The award-winning transaction clearing system proved instrumental for brokers who floated the exchange in 1998, now known as ASX Ltd. The shift from manual to digital processes was seen as a massive leap in operational efficiency at the time.

ASX had planned to replace the decade-old CHESS system beginning in 2016, targeting an April 2021 completion date. However, the project timeline was redefined to April 2023 after re-planning in March 2020.

Subsequently, Digital Assets, ASX’s advisory consultants, flagged the project with a “red RAG” status from June to November 2021, indicating severe risks to timely delivery without appropriate mitigations.

This red status, an IT project management term for serious concerns, was documented and presented to ASX’s audit committee in early February 2022. Nonetheless, ASX published its half-yearly report a week later, asserting that the project was "tracking to plan and progressing well," a statement that ASIC now disputes.

Longo emphasized, “We will argue that the project was not ‘progressing well’ as of February 10, 2022. The postponement and subsequent pause in November 2022 have significantly impacted ASX and the market participants dependent on these assurances.”

Highlighting the necessity for transparent and efficient management of such pivotal projects, Longo remarked, “Ineffective handling erodes confidence in Australia's market's ability to attract investment.”

The original article was published by Neale Prior for The West Australian

Published:Thursday, 15th Aug 2024
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Finance News

Clear

d'Albora Marinas Enhances Sustainable Boating with GoBoat Acquisition

03 May 2026: Paige Estritori

d'Albora Marinas, Australia's largest marina and hospitality network, has recently acquired GoBoat Australia, a company renowned for its sustainable, self-drive electric picnic boats. This strategic move aims to accelerate GoBoat's expansion and strengthen d'Albora's national presence in the marine industry. - read more

Vision Marine Technologies Secures Full Commitment for 2026 Electric Boat Production

03 May 2026: Paige Estritori

Vision Marine Technologies Inc. has announced that its 2026 electric boat production is substantially committed, reflecting a surge in commercial and retail agreements. This milestone underscores the growing demand for sustainable marine solutions and positions Vision Marine as a leader in the electric boating industry. - read more

Marinas26 Conference to Highlight AI's Impact on Marina Operations

25 Apr 2026: Paige Estritori

The Marina Industries Association (MIA) has unveiled the comprehensive program for Marinas26, its biennial conference and trade exhibition, scheduled for 24-27 May 2026 at the RACV Royal Pines Resort on Queensland’s Gold Coast. Embracing the 'Future Smart' theme, the event aims to delve into emerging trends and technologies poised to reshape the marina and boatyard sector across the Asia-Pacific region. - read more

Explore the 2026 Sanctuary Cove International Boat Show's Stellar Exhibitor Line-Up

17 Apr 2026: Paige Estritori

The Sanctuary Cove International Boat Show (SCIBS) is set to make a grand return to the Gold Coast from May 21 to 24, 2026. As the Southern Hemisphere's largest marine event, SCIBS 2026 promises an unparalleled showcase of marine excellence, drawing over 45,000 boating enthusiasts, industry leaders, and luxury lifestyle seekers. - read more

BIA Calls for Balanced Approach to Sand Flathead Fishing Closures in Tasmania

01 Apr 2026: Paige Estritori

The Boating Industry Association (BIA) has recently addressed the Tasmanian Government regarding the proposed closure of sand flathead recreational fishing zones in south-eastern Tasmania, set to commence on 1 March 2026. This initiative aims to protect declining sand flathead populations; however, the BIA emphasises the necessity of a balanced approach that considers both environmental sustainability and the socio-economic well-being of local communities. - read more

BIA Endorses Dolans Bay Marina's Infrastructure Enhancement

01 Apr 2026: Paige Estritori

The Boating Industry Association (BIA) has expressed its support for the proposed infrastructure upgrades at Dolans Bay Marina, recognising the project's potential to significantly improve boating access and safety for individuals of all ages and abilities. This endorsement aligns with the BIA's commitment to promoting safe, responsible, and enjoyable boating experiences across Australia. - read more

Click for more Finance News