Australia's main stock exchange misled the market in relation to the progress of an overhaul of a decades-old information technology system, the corporate watchdog alleges.
The Australian Securities and Investments Commission has filed civil proceedings against ASX Limited in the Federal Court over statements it made about upgrades to its post-trading clearing house platform CHESS.
The statements in question were made in February 2022, and noted the project remained “on track for go-live” in April 2023 and was “progressing well”.
The commission claims these declarations were misleading and deceptive because the project was not running on time and ASX did not have any reasonable basis to imply it would meet future milestones.
Plans to upgrade CHESS, which is used to record shareholdings and manage the settlement of share transactions, were paused in November 2022.
The statements were a "collective failure" by the ASX board and senior executives, commission chair Joe Longo said.
"Trust in our financial system means greater confidence, which means more investment, a stronger economy and more opportunities for all Australians," he told reporters on Wednesday.
"When that trust is abused or people mislead the market, then it is ultimately Australians who lose out.
"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."
The watchdog's deputy chair Sarah Court said ASX needed to be held to the same standard as the companies it lists.
"Whether you're ASX or any other ASX listed company, you need to make sure that what you say about technology projects are accurate at the time that you make them," Ms Court said.
ASX managing director and chief executive Helen Lofthouse said the organisation made "strong progress" since the statements were made.
"We recognise the significance and serious nature of these proceedings," she said.
"We co-operated fully with ASIC’s investigation and are now carefully reviewing and considering the allegations."
ASX is set to report its 2023/24 results on Friday.
The commission is yet to determine the penalty it will seek for ASX's alleged contraventions.
