Investing.com– Australia’s securities regulator announced that it had filed a lawsuit against ASX Ltd (ASX:), the country’s largest exchange operator, for allegedly making misleading statements regarding the replacement of its Clearing House Electronic Subregister System.
The Australian Securities & Investments Commission (ASIC) claimed that ASX’s statements in early 2022, suggesting that the project was set to go live in April 2023, were deceptive as the project was not progressing as planned. ASIC also stated that ASX had no valid reason to assert that the project was on track to meet its goals.
ASIC Chair Joe Longo commented, “We believe this was a collective failure by the ASX Board and senior executives at the time.”
The CHESS replacement project aimed to replace a clearing system that had been in place since the 1990s and was initially designed to incorporate blockchain technology in partnership with a company named Digital Asset.
However, ASX terminated the partnership in 2022 after nearly eight years of development due to the project’s failure to achieve its objectives.
The CHESS system is crucial to the ASX’s trading operations, with ASIC referring to it as “critical national infrastructure vital to the functioning of the Australian economy.”
Longo emphasized, “The CHESS replacement project must be managed effectively and transparently. Failure to do so can erode confidence in Australia as a market to attract investment.”
ASIC stated that it had not yet determined the penalty for ASX’s violations.