The Australian Stock Exchange (ASX) has settled with a regulator and forged ahead with a new roadmap.
Officials at the Australian Stock Exchange (ASX) recently acknowledged that they have settled with their regulator, the Australian Securities & Investments Commission (ASIC), and ended the legal proceedings that were part of a major rebuke by ASIC in response to ASX statements made in 2022 about the status of a major back-office operations replacement project for the Clearing House Electronic Subregister System (CHESS).
Grygo is the chief content officer for FTF & FTF News.
“ASIC commenced civil proceedings against ASX in August 2024, alleging three statements that were made in 2022 regarding the previous CHESS project were misleading,” according to the recent ASX announcement.
“Under the agreement with ASIC, ASX admits that it contravened these provisions of the ASIC Act when it made the ‘progressing well’ representation. ASIC is no longer pursuing allegations of misleading statement in relation to representations the Project was ‘tracking to the Published Plan’ and ‘Tracking to Go-Live in April 2023,’ ” according to the ASX statement. “As part of the settlement, and subject to the approval of the Federal Court of Australia, ASX will pay a penalty of $20.5 million and will contribute $3 million to ASIC’s legal costs. Given this development, the parties will no longer be proceeding to trial.”
Instead, ASX officials say they are proceeding to a completion of “a program of work” to sustain operations for the current CHESS incarnation “until a new CHESS replacement solution is implemented,” officials say. “This program of work is known as the CHESS Roadmap.”
ASX officials have “engaged EY to conduct independent assessment activities over the implementation of the CHESS Roadmap Program … and produce six-monthly findings and recommendations reports. This Report is the sixth planned six monthly report covering the period 1 November 2025 to 30 April 2026.”
ASX officials have reviewed and updated the CHESS Roadmap, and they confirm that:
- “ASX considers that its existing governance, investment and management arrangements for CHESS are commensurate with its role in providing critical financial market infrastructure;” and
- “ASX has and will continue to invest in and enhance CHESS to support the long-term interests of Australia’s financial markets and meet applicable regulatory requirements, including the Financial Stability Standards (FSS). ASX has a program of work to enhance CHESS to ensure it remains operationally reliable until the new solution is implemented in its entirety.”
Officials add that the ASX has begun the replacement of CHESS via a solution from Tata Consultancy Services’ (TCS’) BaNCS Market Infrastructure product group.
The TCS-based replacement “offers a modular technology platform for clearing and settlement services. The platform is being implemented in two main releases. Release 1 (clearing services) went live in April 2026. … Release 2 (settlement and subregister services) is planned to go live in 2029, with ASX’s primary technology build targeted to conclude by the end of 2027,” according to ASX.
“The market must have confidence in what ASX says about its operations as these statements can be relied upon to make decisions,” says David Clarke, chair of the ASX, in a prepared statement. “When we stopped the CHESS project in November 2022 to reassess our whole approach, that tested market confidence in ASX and called into question the nature of statements previously made. I am sorry ASX fell short. We recognize the impact this has on trust and confidence, and we take responsibility for the lessons that must be learned from that experience.”
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