ASX Limited has settled civil proceedings brought by ASIC relating to misleading statements made in 2022 about the previous CHESS project, with the exchange agreeing to pay a penalty of $20.5 million and contribute $3 million toward ASIC’s legal costs. The settlement avoids trial and requires only Federal Court approval, which may occur in late FY26 or FY27. As part of the agreement, ASX admits it contravened provisions of the ASIC Act when it represented that the CHESS project was “progressing well,” though ASIC has discontinued allegations regarding two other representations about tracking to the published plan and go-live timing.
The settlement represents a significant moment for ASX as an operator of critical market infrastructure. The core issue centers on market confidence in ASX’s communications, particularly given the project’s November 2022 halt for reassessment. ASX Chair David Clarke acknowledged that the exchange’s words carry outsized importance and that the company “fell short” in this instance, expressing regret about the impact on market trust and confidence. This candid acknowledgment, while uncomfortable for the organization, signals an attempt to move past the dispute and refocus on rebuilding stakeholder confidence.
For investors, the $20.5 million penalty and associated costs represent material near-term impacts on ASX’s earnings, though both amounts will be recognized as non-recurring significant items in FY26 financial statements and should be excluded from normalized earnings assessments. The settlement eliminates uncertainty around litigation outcomes and potential costs of proceeding to trial, removing what would otherwise have been a drag on investor sentiment. The fact that ASIC abandoned two of its three allegations suggests the exchange successfully defended aspects of its 2022 communications, which may provide some vindication despite the admission on the “progressing well” statement.
More significantly, the settlement provides clarity on the CHESS project itself, which represents a critical strategic undertaking for ASX. The interim CEO confirmed that Release 1 of the new CHESS system was delivered two months ago and is providing clearing services on a cloud-aligned platform. Early performance appears strong, with the system handling elevated trading volumes during periods of market volatility without issue. This operational progress is material for long-term investors assessing ASX’s ability to modernize its technology infrastructure.
The CHESS Partnership Program, which distributes up to $70 million to key market participants supporting the project, remains in place. This ongoing commitment and the successful delivery of Release 1 suggest the project momentum has improved materially since the 2022 halt. ASX appears to have learned from the communication failures identified in this dispute and is positioning the CHESS initiative as a credible undertaking with tangible progress and stakeholder alignment.
Investors should monitor the Federal Court approval hearing and track continued Release delivery milestones for CHESS, as both will be key indicators of ASX’s ability to execute and communicate reliably on its strategic priorities. The settlement is price sensitive and has been flagged as a material announcement by the ASX.
View the full ASX announcement (PDF)
About ASX Limited (ASX: ASX)
ASX Limited is Australia’s primary securities exchange operator and a vertically integrated multi-asset exchange company based in Sydney, Australia. The company provides trading, clearing, settlement, and post-trade services for equities, fixed income, commodities, derivatives, and other financial instruments. As the largest exchange in the southern hemisphere and one of the top 20 global exchange groups, ASX serves as the central market operator for Australian securities and financial markets.
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