ASX has admitted misleading conduct over its CHESS replacement project, putting one of Australia’s core market infrastructure operators under scrutiny over disclosure controls, technology governance and operational risk.
The Australian Securities and Investments Commission and ASX will ask the Federal Court to find that ASX contravened the law, impose an A$20.5 million penalty and order ASX to pay A$3 million towards ASIC’s costs. The proposed orders still require Federal Court approval.
The case centres on ASX’s 10 February 2022 market announcement, which said the CHESS replacement project was “progressing well”. ASX has now admitted that statement was misleading. According to ASIC, ASX has also admitted that, as at 21 December 2021, the project was not on its critical path to go live in April 2023 and needed to return to it. Between that date and the February 2022 announcement, the project was internally classified “red”, indicating significant unresolved issues or risks.
CHESS, the Clearing House Electronic Subregister System, sits at the centre of Australia’s cash equities market. The failed replacement project was designed to move clearing and settlement infrastructure onto a new system using distributed ledger technology. ASX began the project in 2016-17, with Digital Asset and VMware involved in the earlier technology build. After delays, ASX engaged Accenture to review the programme, then paused the project and derecognised approximately A$245–255 million in pre-tax project costs.
Technology transformation becomes a disclosure risk when internal warnings are not reflected in market-facing updates. Major infrastructure programmes that affect settlement, market access and capital allocation need a clear link between board papers, risk ratings, vendor reviews and public statements.
Separately, the Reserve Bank of Australia and ASIC placed ASX under closer operational-risk pressure in March 2025 after the 20 December 2024 CHESS batch settlement failure. The RBA downgraded ASX Clear Pty Limited and ASX Settlement Pty Ltd from “partly observed” to “not observed” against the Operational Risk standard, citing serious concerns that required immediate action.
Complex finance, data and infrastructure programmes need stronger alignment between internal risk reporting and public disclosure. Internal RAG ratings, audit committee papers, vendor reports and public market updates need to tell the same story. If ASX’s proposed penalty is approved, finance teams should expect greater scrutiny of how transformation risk is documented, escalated and translated into market-facing disclosure.
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