Investing.com-- Australia’s securities regulator said it had sued the country’s biggest exchange operator, ASX Ltd (ASX:ASX), for allegedly making misleading statements over the replacement of its Clearing House Electronic Subregister System.

The Australian Securities&Investments Commission alleged that ASX’s statements made in early-2022, that the project was ready to go live in April 2023, were misleading because the project was not progressing according to plan, and that the ASX had no basis to state that the project was on track to meet its targets.

“We believe this was a collective failure by the ASX Board and senior executives at the time,” ASIC Chair Joe Longo said.

The CHESS replacement project was set to replace a clearing system which was in place since the 1990’s, and was initially planned to incorporate blockchain technology through a tie-up with a firm called Digital Asset.

But the ASX had scrapped the tie-up in 2022 after nearly eight years of development, as the project failed to meet its targets.

The CHESS system is the backbone of the ASX’s trading operations, with ASIC referring to it as “critical national infrastructure crucial to the operation of the Australian economy.”

“The CHESS replacement project must be managed effectively and transparently. Failure to do so can lead to a lack of confidence in Australia as a market to attract investment,” Longo said.

The ASIC said it was yet to determine the penalty for ASX’s transgressions.

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