The ASX Ltd (ASX: ASX) share price is rising on Monday morning.
At the time of writing, the stock exchange operator’s shares are up 1% to $49.77.
Why is the ASX share price rising?
Investors have been bidding the embattled company’s shares higher today after it released an update on proceedings brought by the Australian Securities and Investments Commission (ASIC) relating to statements made in 2022 on the progress of the previous CHESS project.
The corporate regulator commenced civil proceedings against ASX in August 2024 alleging three statements that were made in 2022 regarding the previous CHESS project were misleading and contravened the Australian Securities and Investments Commission Act 2001.
According to today’s update, ASX has settled the proceedings and agrees that it contravened these provisions of the ASIC Act when it made the “progressing well” representation.
However, ASIC is no longer pursuing allegations of misleading statements in relation to representations the Project was “tracking to the Published Plan” and “Tracking to Go-Live in April 2023.”
What’s the penalty?
The release reveals that as part of the settlement, and subject to the approval of the Federal Court of Australia, ASX will pay a penalty of $20.5 million and will contribute $3 million to ASIC’s legal costs.
The amount will be provisioned in FY 2026 and be recognised as a non-recurring significant item. ASX’s contribution to ASIC’s legal costs will also be recognised as a significant item in FY 2026.
The good news is that given this development, the two parties will no longer be proceeding to trial.
Commenting on the settlement, ASX chair, David Clarke, said:
The market must have confidence in what ASX says about its operations as these statements can be relied upon to make decisions. When we stopped the CHESS project in November 2022 to reassess our whole approach, that tested market confidence in ASX and called into question the nature of statements previously made. As the market operator and a steward of critical market infrastructure, our words matter.
I am sorry ASX fell short. We recognise the impact this has on trust and confidence, and we take responsibility for the lessons that must be learned from that experience. The CHESS project is now on firmer footing, and our decision to settle this matter reflects the desire by the Board to focus ASX on building for the future while maintaining the work still required to build confidence and deliver for the market. We will continue the reset across the Group, informed by the findings of the ASIC Inquiry report delivered earlier this year.
The post The ASX share price is pushing higher on big ASIC news appeared first on The Motley Fool Australia.
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More reading
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.