Corporate watchdog ASIC has commenced proceedings in the Federal Court against Australia’s largest market operator, ASX Limited, for allegedly making misleading statements related to its Clearing House Electronic Subregister System (CHESS) replacement project.

ASIC alleges statements made in ASX announcements on 10 February 2022 that the project remained “on-track for go-live” in April 2023 and was “progressing well” were misleading.

ASIC alleges these statements implied the project was tracking to ASX’s announced project plan and was on track to meet future milestones, including “go-live” in April 2023.

ASIC alleges those representations were misleading and deceptive because, at the time of the announcements, the project was not tracking to plan and ASX did not have any reasonable basis to imply the project was on track to meet future milestones.

“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,” ASIC Chair Joe Longo said in a statement.

“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.”

ASIC is yet to determine the penalty it will seek for ASX’s alleged contraventions.

On 7 March 2024, ASIC announced ASX had paid a penalty of $1,050,000 following an ASIC investigation into its compliance with the market integrity rules.

More recently, ASIC took action against a “pump and dump” scheme and attempted manipulation of commodities markets. These proceedings underscore ASIC’s commitment to ensuring all market participants comply with the law.

ASX has been contacted for comment.