ASX agreed to settle with ASIC over misleading 2022 statements about the CHESS replacement project, paying A$20.5 million in penalties and A$3 million in costs. Under the settlement, ASX admitted that a 10 February 2022 market announcement stating the project was 'progressing well' was misleading, despite the exchange internally classifying the project as 'red' before the announcement, indicating major unresolved issues and significant delivery risks. The CHESS replacement project, which began during 2016 and 2017 as an attempt to modernize Australia's core clearing and settlement infrastructure using distributed ledger technology, was paused in November 2022, with ASX derecognizing approximately A$245 million to A$255 million in pre-tax project costs.
ASX Settles With ASIC for A$20.5 Million Over Misleading CHESS Statements
ASX agreed to settle legal proceedings brought by the Australian Securities and Investments Commission related to allegedly misleading statements made in 2022 regarding the CHESS replacement project. Under the proposed settlement, ASX agreed to pay A$20.5 million in penalties and A$3 million toward ASIC's legal costs, subject to approval by the Federal Court of Australia.
ASIC originally launched proceedings in August 2024 alleging ASX made misleading statements regarding the status of the CHESS replacement project. ASIC Chair Sarah Court said, "ASX has admitted to making a misleading statement in relation to critical market infrastructure at the centre of Australia's financial system." She added, "These admissions concern the accuracy of disclosures to the market about a significant and complex project that carried real consequences for confidence, planning, and investment across the market."
ASX Admits February 2022 Progressing Well Statement Was Misleading
Under the settlement, ASX admitted that a 10 February 2022 market announcement stating the project was "progressing well" was misleading. ASIC said ASX internally classified the project as "red" before the announcement, indicating major unresolved issues and significant delivery risks.
The regulator also said the project had fallen off its critical path toward an April 2023 launch, industry testing environments opened with reduced scope, important work remained incomplete, and project timelines had already slipped internally. Despite those issues, ASX publicly maintained the project was progressing appropriately. Only six weeks later, ASX informed markets there was a strong likelihood the launch date would be delayed.
David Clarke, Chair of ASX, said, "The market must have confidence in what ASX says about its operations as these statements can be relied upon to make decisions." He added, "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." Clarke also said, "As the market operator and a steward of critical market infrastructure, our words matter. I am sorry ASX fell short."
CHESS Replacement Project Paused in November 2022 After A$245 Million Cost Writedown
In November 2022, the exchange paused the project entirely and derecognized approximately A$245 million to A$255 million in pre-tax project costs. The CHESS replacement project originally began during 2016 and 2017 as a major attempt to modernize Australia's core clearing and settlement infrastructure using distributed ledger technology. At the time, the initiative was widely viewed as one of the most ambitious blockchain-based exchange infrastructure projects globally.
The exchange said the settlement reflects a broader effort to restore market confidence while focusing on delivering the replacement project through a revised approach.
ASX Release 1 Went Live in April 2026
ASX said the new replacement structure now operates through Release 1 focused on clearing services and Release 2 focused on settlement and subregister functionality. According to ASX, Release 1 successfully went live in April 2026.
Interim CEO Darren Yip said the updated platform continued processing elevated trading volumes during periods of heightened global market volatility. Darren Yip, Interim CEO of ASX, said, "CHESS remains a critical priority for the Group." He added, "Since go-live of Release 1, CHESS has continued to perform strongly, consistently processing elevated trading volumes during periods of heightened global market volatility – underscoring its resilience and scalability."
FAQ
What did ASX admit in the settlement with ASIC?
ASX admitted that a 10 February 2022 market announcement stating the CHESS replacement project was "progressing well" was misleading, despite the exchange internally classifying the project as "red" before the announcement, indicating major unresolved issues and significant delivery risks.
How much did ASX agree to pay in the ASIC settlement?
ASX agreed to pay A$20.5 million in penalties and A$3 million toward ASIC's legal costs, subject to approval by the Federal Court of Australia.
When did ASX pause the CHESS replacement project?
ASX paused the CHESS replacement project in November 2022 and derecognized approximately A$245 million to A$255 million in pre-tax project costs.
