Australia's ASX has conceded it made misleading statements regarding its troubled CHESS software upgrade project and will pay A$20.5 million ($14.50 million) in penalties, pending Federal Court approval.

The Australian Securities & Investments Commission (ASIC) initiated legal action against ASX in August 2024, claiming the exchange's 2022 statements about the Clearing House Electronic Subregister System (CHESS) — originally scheduled to launch in 2023 — deceived investors. Internal records showed ASX had classified the project as "red" by late 2021, signalling serious delivery risks. The audit and risk committee was briefed on this status just days before ASX's February 2022 trading update, court documents revealed.

In a February 10, 2022 statement announcing then-CEO Dominic Stevens' retirement plans, ASX described the replacement project as "progressing well". This characterisation contradicted its own risk assessments at the time. The exchange ultimately abandoned the original CHESS initiative in November 2022 following multiple setbacks and substantial remediation expenses.

ASX will contribute an additional A$3 million towards ASIC's legal costs. Both amounts will be recorded as non-recurring significant items in the company's fiscal 2026 accounts. The penalty settlement resolves the regulatory dispute, though market observers suggest reputational damage and governance concerns may linger until the organisation demonstrates sustained operational improvements or faces genuine competitive challenges.

ASX's revised CHESS system commenced operations in April, with completion targeted for 2029. The company's shares rose 2.6% to A$50.46 on the news, outpacing the broader market's 1.3% gain.