An Australian Securities Exchange (ASX) shareholder plans to seek Federal Court permission to sue certain former ASX officers and directors over alleged breaches of duty connected to its failed blockchain-based clearing and settlement overhaul.
On Wednesday, ASX said Rosherville Pty Ltd had notified the exchange that it proposes to apply for leave to commence a statutory derivative action under sections 236 and 237 of Australia’s Corporations Act. If approved, Rosherville would bring the proceedings on ASX’s behalf.
The exchange said there were no allegations against ASX itself. It did not identify the former officials targeted, describe their alleged breaches in detail or disclose the remedies Rosherville intends to seek, while the court has not considered whether the proposed case can proceed.
The proposed lawsuit could test whether shareholders can hold former ASX leaders accountable for overseeing one of Australia’s costliest financial-technology failures.
Failed CHESS overhaul draws regulatory action
ASX began exploring a replacement for its Clearing House Electronic Subregister System, or CHESS, in 2016 and selected a distributed-ledger system developed with New York-based Digital Asset. In December 2017, ASX was expected to become the first securities exchange to use blockchain for its core services.
The intended launch was repeatedly postponed. In November 2022, ASX paused the project after an Accenture review found significant problems with its design and ability to meet the exchange’s requirements. In May 2023, ASX had formally abandoned blockchain for the replacement and would consider more conventional technology.
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