Stock exchange operator ASX on Wednesday said the Australian Securities and Investments Commission had launched a probe into suspected contraventions of the ASIC and corporations acts.
The alleged breaches are in relation to the ASX's botched replacement of CHESS, the system used to record transactions on the financial markets.
ASIC is investigating whether a number of ASX entities or their directors broke a series of corporate provisions in relation to their oversight of the replacement program.
It is also looking into statements and disclosures made about the status of the program.
In a statement, ASX said it took its obligations very seriously and would cooperate fully with the watchdog's investigation.
ASIC in 2021 ordered experts to review the stock exchange system and the CHESS replacement after a long market outage in November 2020.
The replacement system was due in April this year, but in November 2022 the ASX walked away from a seven-year $250 million project to replace CHESS with a blockchain-based system.
The move followed a scathing external review from consultancy firm Accenture, which identified a string of issues with the long-running project.
The ASX is considering alternate options for replacing the ageing system and plans to announce a design for the project in the final three months of the year.
It has not put a timeline on the new system being rolled out.
ASIC chairman Joe Longo told a federal parliamentary inquiry last month the ASX had a long way to go to restore trust in its ability to handle the CHESS upgrade and he believed it would take several years for the replacement system to be introduced.
The watchdog earlier in February said it was taking further action to ensure the ASX was properly responding to Accenture's review, ordering it to produce two special reports on the issue.
Mr Longo said at the time that these reports would help ASIC decide whether further regulatory action was needed.
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