The Federal Court has ordered ASX Limited to pay a $20.5 million penalty for its misleading statement about the progress of its CHESS replacement project.

The penalty decision is in line with a settlement between ASX and the Australian Securities and Investments Commission (ASIC) reached last month.

ASX has admitted that its 10 February 2022 market announcement stating the CHESS replacement project was “progressing well” was misleading and exposed market participants to the risk of financial harm.

ASX was also ordered to pay $3 million toward ASIC’s costs.

On 13 August 2024, ASIC commenced civil penalty proceedings in the Federal Court against ASX alleging it made misleading statements about the CHESS replacement project in market announcements.

On 15 June 2026, ASX admitted that, by making the misleading statement that the CHESS replacement project was ‘progressing well’, it contravened sections 12DA and 12DB(1)(a) and (e) of the Australian Securities and Investments Commission Act 2001 (Cth).

The CHESS replacement project was a critical financial infrastructure project to replace the Clearing House Electronic Subregister System (CHESS) operated by ASX, with a new system using distributed ledger technology.

ASX commenced the project in 2016-17 and planned for it to ‘go live’ in April 2023.

On 28 March 2022, about six weeks after telling the market the project was “progressing well”, ASX announced there was a strong likelihood the project would be delayed.

On 17 November 2022, ASX paused the project and derecognised approximately $245-$255 million (pre-tax) in its own project costs.

In November 2023, ASX announced a new CHESS replacement solution would be delivered in two releases, with clearing services in Release 1 and settlement and subregister services in Release 2. Release 1 went live on 20 April 2026.