Australia's stock exchange operator will pay a $20.5 million penalty after making a misleading statement that the corporate watchdog says risked undermining confidence in Australia's financial markets.
The deal means ASX Ltd will avoid a trial in relation to three statements made four years ago regarding the status of a multi-million-dollar project to upgrade its clearing and settlement system.
The work on CHESS involved replacing the 25-year-old technology with a distributed ledger, the same technology used by cryptocurrencies such as Bitcoin and Ethereum.
The ASX told investors in a February 2022 statement that the project was "progressing well", but six weeks later announced there was a strong likelihood that its go-live date would be delayed.
It later scrapped the project and wrote off costs of around $245 million to $255 million.
As part of the deal between the bourse operator and the commission, and pending Federal Court approval, ASX will pay a penalty of $20.5 million and another $3 million toward the regulator's legal costs.
"ASX has admitted to making a misleading statement in relation to critical market infrastructure at the centre of Australia’s financial system," said ASIC chairwoman Sarah Court in a statement.
"These admissions concern the accuracy of disclosures to the market about a significant and complex project that carried real consequences for confidence, planning, and investment across the market.
"Accurate and timely disclosures are fundamental to maintaining trust in Australia's financial markets, particularly from entities that operate core market infrastructure."
ASX chairman David Clarke said that when the ASX stopped the CHESS replacement project in November 2022 to reassess its approach, it tested market confidence in ASX and called into question the nature of the statement previously made.
"I am sorry ASX fell short," he said.
Having obtained an admission to the "progressing well" statement, the commission has dropped action related to the remaining two statements.
The new CHESS system eventually went live in April, after the upgrade was first approved in 2016.
The ASX has since committed to strengthen its oversight, governance and delivery of the CHESS replacement program.
