The Federal Court has ordered ASX Limited (ASX) to pay a $20.5 million penalty for its misleading statement about the progress of its CHESS replacement project.
The penalty decision follows ASX’s admission that its 10 February 2022 market announcement stating the CHESS replacement project was “progressing well” was misleading and exposed market participants to the risk of financial harm.
ASIC Chair Sarah Court said, ‘Today’s penalty reflects the seriousness of ASX’s misleading conduct about a project central to the stability of Australia’s financial system.
‘Listed entities must be accurate and transparent when updating the market on significant projects, particularly where delays and risks have the potential to affect confidence, investment and decision-making across the market.
‘For market operators, that responsibility is even greater, given their role in maintaining critical market infrastructure and ensuring confidence in Australia’s financial system,’ the Chair said.
In delivering her reasons, Justice Markovic said, ‘given its role, ASX is a gatekeeper for preserving the integrity of, and confidence in, Australia’s financial system and should have been setting a benchmark for accuracy and transparency in its own market disclosures.
‘As the operator of critical market infrastructure, [ASX] is expected to adhere to high standards. In light of the contraventions, it fell short of those standards.’
Her Honour said it was ‘also necessary that the market as a whole understands that misleading announcements made by disclosing entities about their operations will be the subject of significant penalties and there is a need to deter other listed entities from making misleading announcements about the progress of significant projects in which they may be engaging, including where the completion of that project involves third parties.’
ASX was also ordered to pay $3 million toward ASIC’s costs.
