Investing.com–Australia’s securities regulator said it has sued the country’s largest exchange operator, ASX Ltd (ASX:), for allegedly making misleading statements about the replacement of its Clearing House Electronic Subregister System.
The Australian Securities & Investments Commission alleged that ASX’s statements in early 2022 that the project was ready to go live in April 2023 were misleading because the project was not progressing as planned, and that the ASX had no basis for stating that it project was on track to achieve its objectives.
“We believe this was a collective failure by the ASX board and senior executives at the time,” ASIC chairman Joe Longo said.
The CHESS replacement project would replace a clearing system that had been in place since the 1990s, and was initially planned to integrate blockchain technology through a partnership with a company called Digital Asset.
But the ASX had scrapped the partnership in 2022 after almost eight years of development, saying the project was not meeting its objectives.
The CHESS system forms the backbone of the ASX’s trading operations, with ASIC citing it as “critical national infrastructure that is crucial to the functioning of the Australian economy.”
“The CHESS replacement project must be managed effectively and transparently. Failure to do so could lead to a lack of confidence in Australia as a market to attract investment,” Longo said.
The ASIC said it has yet to determine the penalty for ASX’s offences.
