ASX hit with court action over core replacement status updates

ASX’s ill-fated attempt to re-platform its core trading system on distributed ledger technology has landed it in trouble with the Australian Securities and Investments Commission (ASIC).

ASIC said it has filed Federal Court proceedings against ASX for statements that the market operator made as to the project’s progress and technology’s readiness.

Specifically, ASIC alleges statements that the project remained “on-track for go-live” and was “progressing well” were misleading.

“Companies and market participants rely on what the ASX says about its operations to make their own decisions and investments,” ASIC chair Joe Longo said in a statement.

“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.”

Longo said the “critical importance” of the core replacement project should have been “all the more reason ASX needed to ensure it told the Australian public the truth about how the project was tracking and whether it would be completed on time.”

ASX abandoned a distributed ledger-based replacement of its core trading system in November 2022 due to project management issues, as well as technical and scalability concerns, but not before the broader finance sector had sunk considerable time and money into supporting it.

It still intends to replace the system, but has gone back to the drawing board for a new approach.

The exchange last year committed to “lift transparency” in the way the replacement program progressed.

https://www.itnews.com.au/news/asx-concedes-it-must-lift-transparency-on-core-replacement-591258 

ASIC said it is “yet to determine the penalty it will seek for ASX's alleged contraventions.”