Key takeaways:
- The nation’s top stock exchange is being sued by the ASIC on the grounds that it made “misleading and deceptive” representations.
- It finally decided on a distributed ledger technology (DLT)-based solution about two years later.
The nation’s top stock exchange is being sued by the Australian Securities and Investments Commission (ASIC) in Federal Court on the grounds that it made “misleading and deceptive” representations about its now-abandoned effort to replace its outdated systems with blockchain technology.
On August 14, ASIC declared that the claims made by the Australian Securities Exchange (ASX) that the project to replace its Clearing House Electronic Subregister System (CHESS) trading platform was “progressing well” and “on track for go-live” in April 2023 were false.
When the representations were issued in early February 2022, the regulator said, the project “was not tracking to plan” and the ASX had no “reasonable basis” to indicate the project would be ready by that date. ASIC Chair Joe Longo stated:
“We allege that the true state of affairs as at 10 February 2022 was that the project was not ‘progressing well,’ contrary to ASX’s announcement,”
According to ASIC, the punishment it will pursue has not yet been decided. ASX decided to replace CHESS, the computer system that was initially implemented in the mid-1990s and is used to manage share transactions and record shareholdings, in the beginning of 2016.
It finally decided on a distributed ledger technology (DLT)-based solution about two years later.
After five years of work, numerous delays, and spending $170 million (255 million Australian dollars), ASX announced in November 2022 that it had “paused” project work after consulting firm Accenture discovered serious issues with the solution design and its “ability to meet ASX’s requirements.”
Later on, it gave up on its blockchain intentions to look into more traditional options. The replacement project “must be managed effectively and transparently,” according to Longo of ASIC.
The Brazilian Securities and Exchange Commission reported that Binance was providing services for trading derivatives in the nation without the necessary license. Binance’s 2023 request to pay $365,000 to conclude the investigation was first turned down by CVM.
