The Australian Securities Investment Commission (ASIC) has begun the proceedings in the Federal Court regarding ASX Limited’s alleged misleading statements about the Clearing House Electronic Subregister System (CHESS) replacement project.
According to the ASIC’s report, ASX’s announcement on 10 February 2022 that the project that continued to be “on-track for go-live” and was progressing well was misleading. In reality, the project was allegedly not going according to plan and ASK did not have a reliable and reasonable basis which implied that the project would be able to meet milestones in the future.
“ASX’s statements go to the heart of trust in the integrity of our markets. We believe this was a collective failure by the ASX Board and senior executives at the time,” said ASIC Chair Joe Longo.
“Companies and market participants rely on what the ASX says about its operations to make their own decisions and investments. We expect the ASX to be a place to list and invest with confidence. When the ASX falls short, it has wide ranging consequences across the market,” he added.
Longo added that ASX’s CHESS replacement served as a technology project with fundamental significance which replaced the critical national infrastructure that was crucial to the Australian economy’s operation.
He said that the critical importance of the CHESS replacement meant that ASX needed to tell the Australian public the truth about the project and if it would be able to be completed on time.
“We allege that the true state of affairs as at 10 February 2022 was that the project was not ‘progressing well,’ said Longo.
“The CHESS replacement project must be managed effectively and transparently. Failure to do so can lead to a lack of confidence in Australia as a market to attract investment,” he added.
In March, the ASIC announced that ASX had paid it a penalty of $1,050,000 after it conducted an investigation about the firm’s compliance with market integrity rules.
