A shareholder is seeking Federal Court permission to sue former Australian Securities Exchange (ASX) officers and directors, as reported by Cointelegraph.

The alleged breaches of duty connect to the exchange’s failed blockchain-based clearing and settlement overhaul.

ASX confirmed the notice in a market announcement.

Shareholder Rosherville Pty Ltd told the exchange it plans to apply for leave to commence a statutory derivative action under sections 236 and 237 of the Corporations Act.

If the Federal Court grants leave, Rosherville would bring proceedings on ASX’s behalf.

The proceedings would target certain former officers and directors over their alleged conduct relating to the earlier CHESS replacement project.

ASX said the proposed action makes no allegations against ASX itself.

The exchange did not identify the individuals targeted, detail the alleged breaches, or disclose what remedies Rosherville intends to seek. The court has not yet considered whether the case can proceed.

To succeed, Rosherville must satisfy the court on five separate points.

Rosherville must show that ASX itself is unlikely to bring or properly pursue the claim. The application must also demonstrate good faith, and that granting leave serves ASX’s best interests.

A serious question must exist to be tried. Rosherville must also show that it gave ASX at least 14 days’ written notice of its intention to apply.

If Rosherville fails to meet any of these conditions, the court cannot grant leave.

How the CHESS Project Collapsed

ASX began exploring a blockchain-based replacement for its ageing Clearing House Electronic Subregister System (CHESS) in 2016.

It worked with New York-based Digital Asset on a distributed-ledger system meant to make ASX the first major securities exchange to run core settlement infrastructure on blockchain.

The project faced repeated delays.

ASX paused the project in November 2022 after an Accenture review found significant design flaws.

The company then formally abandoned blockchain entirely in 2023 in favour of a more conventional system from Tata Consultancy Services, at a cost estimated around A$250 million.

The Australian Securities and Investments Commission (ASIC) sued ASX in August 2024.

It alleged the exchange had no reasonable basis to tell the market in February 2022 that the project was “progressing well” and on track for an April 2023 launch.

ASX admitted to misleading conduct over those statements in June 2026.

ASIC Chair Sarah Court said accurate and timely disclosure “matters most from the firms that run the market’s core plumbing.”

On 3 July, the Federal Court ordered ASX to pay an A$20.5 million penalty, plus roughly A$3 million toward ASIC’s legal costs.

This closed the regulator’s case just weeks before Rosherville notified ASX of its own proposed action against former officials.

Featured image: Edited by Fintech News Australia based on an image by pixel-shot-com via Magnific.