Federal Court Fines ASX A$20.5 Million for Misleading CHESS Replacement Statements

According to Australia's Federal Court judgment published on July 3, the Australian Securities Exchange was ordered to pay a A$20.5 million civil penalty plus A$3 million toward the Australian Securities and Investments Commission's legal costs after being found to have misled investors about its troubled CHESS replacement programme.

The Federal Court found ASX's February 10, 2022 market announcement describing the project as "progressing well" was misleading despite internal information showing serious delivery concerns. Just six weeks later, ASX informed investors the project would likely face significant delays. Justice Markovic emphasized that as operator of Australia's critical market infrastructure, ASX "should have been setting a benchmark for accuracy and transparency" but "fell short of those standards."