ASIC to take a look at ASX Chess system outage in December

It’s checkmate for the Australian Securities Exchange as corporate regulators kick off an investigation into the Chess trading system failure on December 20.

Chess tracks share ownership on Australia’s stock market but was hit by an extraordinary outage just days before Christmas.

Trading was shut down for an afternoon, shaking investor confidence in one of the world’s top financial exchanges.

The failure was blamed on a network issue that was undetected for nearly a decade.

But the corporate watchdog is set to take a closer look at the incident. The ASX told its own shareholders on Monday morning that the Australian Securities and Investments Commission was investigating the failure.

“ASIC has notified ASX that it has commenced an investigation into the CHESS Batch Settlement incident that occurred on 20 December 2024,” the statement said.

“ASIC’s investigation is into ASX Settlement Pty Limited’s compliance with (the Corporations Act).

“ASX takes its regulatory obligations seriously and will cooperate fully with ASIC.”

The stock market operator last month distributed about $1 million of rebates to apologise for the failure.

The corporate regulator did not immediately respond to a request for comment.

It’s not the first fight between the corporate regulator and the ASX.

ASIC took the $12 billion business to Federal Court in August last year amid ongoing fallout over the long-stalled project to replace the Chess system.

That battle hinged on statements made by the ASX in February 2022 claiming the replacement project would go live in April 2023. The project was paused just seven months later.

At the time, ASIC chair Joe Longo said: “ASX’s statements go to the heart of trust in the integrity of our markets”.

“We believe this was a collective failure by the ASX board and senior executives at the time.”

But the ASX filed a defence in November.

Chief executive Helen Lofthouse said the ASX accepted the delays had caused disruption.

“However, there was a reasonable basis for the statements ASX made about the project’s progress on 10 February 2022 and we do not accept the allegations that we breached the law.”

Shares in the ASX company — which are listed on the ASX trading platform — were down 1.9 per cent to $62.27 on Monday.