The ASX Ltd (ASX: ASX) share price is in focus today after the company announced it will pay a $20.5 million penalty and contribute $3 million to ASIC's legal costs, settling longstanding legal proceedings related to its previous CHESS project.
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What did ASX report?
- Settled ASIC civil proceedings relating to past statements about the previous CHESS project
- Admitted to contravening provisions of the ASIC Act over "progressing well" claims
- Agreed to pay $20.5 million penalty (subject to Federal Court approval)
- Will also contribute $3 million to ASIC's legal costs
- Penalty and costs to be provisioned as significant items in FY26
What else do investors need to know?
ASX's decision to resolve the ASIC proceedings means both parties will not proceed to trial. The penalty and legal costs—together totalling $23.5 million—will be recognised as one-off, non-recurring items in financial year 2026.
The Federal Court will still need to formally approve the proposed settlement, which could occur as late as financial year 2027. ASX says its Board made this decision to help restore confidence and focus on ongoing strategic initiatives.
What did ASX management say?
ASX Chair David Clarke said:
The market must have confidence in what ASX says about its operations as these statements can be relied upon to make decisions. When we stopped the CHESS project in November 2022 to reassess our whole approach, that tested market confidence in ASX and called into question the nature of statements previously made.
As the market operator and a steward of critical market infrastructure, our words matter. I am sorry ASX fell short. We recognise the impact this has on trust and confidence, and we take responsibility for the lessons that must be learned from that experience.
The CHESS project is now on firmer footing, and our decision to settle this matter reflects the desire by the Board to focus ASX on building for the future while maintaining the work still required to build confidence and deliver for the market. We will continue the reset across the Group, informed by the findings of the ASIC Inquiry report delivered earlier this year.
What's next for ASX?
ASX Limited says it's moving ahead with its technology refresh, noting that Release 1 of the new CHESS system went live recently, providing modernised clearing services and processing increased trading volumes smoothly. Management describes CHESS as a critical priority and is directing significant investment towards this technology upgrade.
The company continues to roll out its CHESS Partnership Program, which supports key stakeholders with up to $70 million in financial distributions during the extended timeline for the new CHESS project.
