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<p>The post <a href="https://coinpedia.org/news/asic-sues-asx-over-250m-software-fail-what-investors-need-to-know/">ASIC Sues ASX Over $250M Software Fail: What Investors Need to Know</a> appeared first on <a href="https://coinpedia.org">Coinpedia Fintech News</a></p> 
<p>ASX, Australian Securities Exchange, is in hot water. The Australian Securities and Investments Commission (ASIC) has filed a lawsuit against ASX, accusing the company of misleading the public about a major software upgrade. This project was supposed to modernize the way trades are settled using new technology, but it didn’t go as planned.</p> 
<h2 class="wp-block-heading" id="h-the-asx-issue">The ASX Issue</h2> 
<p>In February 2022, the securites exchange told the public that its Clearing House Electronic Subregister System (CHESS) upgrade was “on track” and would be ready by April 2023. But ASIC says that wasn’t true. By late 2021, ASX knew the project was in trouble. Internally, they even marked it as “red,” meaning there were serious risks. Despite this, ASX assured investors everything was fine. </p> 
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  <a href="https://x.com/asicmedia/status/1823491475868672146" target="_blank" rel="noreferrer noopener"><img decoding="async" width="633" height="438" src="https://image.coinpedia.org/wp-content/uploads/2024/08/14104844/ASIC-tweetabout-ASX.png" alt="ASIC tweet about ASX" class="wp-image-338396" srcset="https://image.coinpedia.org/wp-content/uploads/2024/08/14104844/ASIC-tweetabout-ASX.png 633w, https://image.coinpedia.org/wp-content/uploads/2024/08/14104844/ASIC-tweetabout-ASX-300x208.png 300w, https://image.coinpedia.org/wp-content/uploads/2024/08/14104844/ASIC-tweetabout-ASX-150x104.png 150w" sizes="(max-width: 633px) 100vw, 633px"></a>
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   Source : X(Formerly Twitter)
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<p>ASIC’s head, Joe Longo, called this a “collective failure” by ASX’s leadership. The <a href="https://asic.gov.au/about-asic/news-centre/find-a-media-release/2024-releases/24-177mr-asic-sues-asx-for-alleged-misleading-statements/?altTemplate=betanewsroom" target="_blank" rel="noreferrer noopener">lawsuit</a> claims that the actions of the exchange could have hurt the trust in Australia’s financial markets, which are a key part of the economy.</p> 
<h2 class="wp-block-heading" id="h-a-promising-project-gone-wrong">A Promising Project Gone Wrong</h2> 
<p>The Australian Securities Exchange started working on the CHESS upgrade in 2016. They wanted to use blockchain technology to make the system more modern. But things didn’t go smoothly. The project faced delays, and by November 2022, ASX had to give up on the idea. They had spent millions and still weren’t close to finishing the upgrade.</p> 
<p>A review by Accenture found that there were major problems, like unclear timelines and poor communication between ASX and its software provider. Even though only 62% of the software was finished, ASX leaders claimed it was ready to go.</p> 
<h2 class="wp-block-heading" id="h-what-happens-next">What Happens Next?</h2> 
<p>On 7 March 2024, ASIC announced that ASX had paid a penalty of $1,050,000 following an ASIC investigation into its compliance with the market integrity rules. This lawsuit is the first time ASIC has taken ASX to court over the failed upgrade. ASX could face hefty fines, adding to the money already lost on this project. The company’s stock price has dropped, showing that investors are worried about what’s next.</p> 
<p>ASX’s CEO, Helen Lofthouse, who took over in August 2022, says the company is cooperating with ASIC and is focused on moving forward. While the lawsuit targets the company and not individual leaders, ASIC emphasizes that this was an <a href="https://www.asx.com.au/content/dam/asx/about/media-releases/2024/33-14-august-2024-asx-statement-on-asic-proceedings.pdf" target="_blank" rel="noreferrer noopener">organizational failure</a>.</p> 
<h2 class="wp-block-heading" id="h-final-thoughts">Final Thoughts</h2> 
<p>The lawsuit against Australian Securities Exchange is a big deal for Australia’s financial system. It shows how important it is for companies to be honest and transparent, especially when dealing with critical technology. As the case unfolds, ASX will need to work hard to rebuild trust and prove it can manage such important projects in the future.</p>

ASIC Sues ASX Over $250M Software Fail: What Investors Need to Know

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