The corporate regulator is suing Australia’s stock exchange operator, the Australian Securities Exchange (ASX), in the Federal Court for allegedly misleading statements made in relation to the replacement of its clearing and settlement system, the Clearing House Electronic Subregister System (CHESS).

The Australian Securities and Investments Commission (ASIC) alleges that announcements made by the ASX on February 10, 2022, on its own platform misled the market when it claimed that the CHESS project remained “on-track for go-live” in April 2023 and was “progressing well”.

“We allege the ASX misled the market and misled Australians about its progress,” ASIC Chair Joe Longo told reporters at a press conference in Melbourne.

“The delay and subsequent abandonment of the project to replace CHESS caused significant cost not only to ASX, but to market participants who rely on assurances as to the progress of the project and scheduled go-live date.

“This is a collective failure of the board and obviously the executive team at the time of ASX. We see this as a collective organisational failure.”

ASIC Deputy Chair Sarah Court said that in her view, ASX must accept organisational accountability for the alleged misconduct. She said ASIC is seeking declarations that there have been contraventions of the law, together with penalties which are yet to be determined.

“In this case, we are alleging that the country’s largest market operator made misleading statements to the market relating to a significant technology project that aims to replace critical national infrastructure. It doesn’t get much more significant than this,” she said.

“This case goes to the very heart of one of our important priorities for the year, and that is the technological and operational resilience of market participants, including market operators like ASX.”

ASX boss Helen Lofthouse said the bourse operator understood the serious nature of the allegations made by ASIC.