ASX delays CHESS replacement to April 2023
The Australian Securities Exchange (ASX) has pushed back the replacement of its Clearing House Electronic Subregister System (CHESS) until April 2023.
The CHESS replacement was delayed twice before in 2018 and July 2020
ASX consulted with more than 100 organisations during an “extensive” industry consultation phase.
It also spoke with regulators, technology partners, and conducted a “comprehensive project review.”
A majority of those involved indicated that they would meet with the original deadline of April 2022.
Yet more asked for extra industry testing, preparation, and additional functionality to reduce manual processes.
The industry also requested “substantially more post-trade processing capacity” than what had been contemplated before the coronavirus pandemic.
This is in reaction to a period of “unprecedented” daily trade volumes in March 2020, with bursts of around 3.5 million trades.
As a result, the need for a replacement system to scale to higher processing levels is now a “day one” requirement.
The exchange started its replacement project in 2015. It selected Digital Asset as its technology partner in January 2016 to develop a prototype based on blockchain technology.
In December 2017, ASX announced that CHESS would be replaced with the Digital Asset blockchain system. The industry consultation launched in April 2018.
The project has been delayed twice before. In September 2018 ASX pushed the live date to Q4 2020, and July 2020 it was further extended to April 2022.
Evolution and improvement
“ASX has listened to the industry, regulators and its technology partners throughout this project,” says Dominic Stevens, ASX CEO.
“It is clear that COVID-19 continues to impact the whole industry, including ASX, and this has evolved what our stakeholders want from the CHESS replacement system.
“In parallel, ASX has considered how we can reduce delivery risk, enhance the customer experience and continuously improve project execution.
“Consequently, we have increased the scope of the project and extended the timeline.”
ASX says it will continue to invest in the current CHESS system, including strengthening its resilience, capacity and processing efficiency.
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