A long-scrutinised internal effort at the offices of the Australian Securities Exchange (ASX:ASX) to overhaul old software – called CHESS – has seen ASIC sue the ASX for alleged misleading claims back in 2022.
Without going into the finer (and boring) details, the ASX uses a system called CHESS to mange the actual buying and selling of shares at the internal level. If you’re a trader, you probably get a lot of “CHESS statements” – that’s the same system we’re talking about.
Long story short, the bourse operator wants to overhaul that system to something more modern. Easy enough to understand. The issue is it’s been bungling that rollout for years now, with investment bank analysts long cautious on the ASX stock itself given the overrun.
Now, ASIC has sued the operator of the Australian share market for allegedly misleading claims about the progress of the CHESS replacement back in 2022.
Namely, the ASX told the market in February of 2022 that the CHESS replacement remained “on-track for go-live” in April of 2023.
It’s now August of 2024, and we don’t have a new replacement for the CHESS system. ASIC has now put it to Australians the ASX was acting in a “deceptive” manner.
“We believe this was a collective failure by the ASX Board and senior executives at the time,” ASIC chair Joe Longo said.
“We allege that the true state of affairs as at 10 February 2022 was that the project was not “progressing well”, contrary to ASX’s announcement.
“The CHESS replacement project must be managed effectively and transparently. Failure to do so can lead to a lack of confidence in Australia as a market to attract investment.”
ASX CEO Helen Lofthouse was less forthcoming.
“We recognise the significance and serious nature of these proceedings. We cooperated fully with ASIC’s investigation and are now carefully reviewing and considering the allegations,” Lofthouse said.
ASX last traded at $65.87.