Australian Securities Exchange (ASX) to Further Postpone Roll Out to Chess Replacement System

The Australian Securities Exchange (ASX) is reportedly set to enforce yet another delay to the cutover of its blockchain-powered post-trade network, which was initially expected to go-live in April of last year.

The ASX has been working cooperatively with distributed ledger tech (DLT) specialist Digital Asset since 2017 in order to fully replace its Chess post-trade settlement system with a DLT-enabled solution.

In March 2021, the ASX had confirmed a 1-year delay to the launch of the system. The Exchange had said that the delay was due to the overall impact of the COVID-19 outbreak on market volatility and user demands for more testing and additional functionality. The latter issue is proving quite problematic, with the ASX informing clients of unspecified issues and challenges with the timing of the upcoming software release from Digital Asset Holdings.

This latest announcement has been made after ASX Chair Damian Roche, departing Chief Executive Dominic Stevens and the Executive in charge of Chess replacement, Tim Hogben, flew to New York at fairly short notice this past week for a meeting with Digital Asset executives.

ASX’s management stated:

“At this time, ASX advises that there is a strong likelihood of delay to the go-live date. We will engage with our software provider and stakeholders to assess the impact, and will update the market on this process.”

As covered in March 2020, the ASX had announced that its planned replacement for CHESS – the backbone system of the stock exchange has been impacted by the COVID-19 pandemic. The exchange said the implementation timetable has been altered due to the uncertainty created by the unfolding crisis.

The ASX said that it was responding to user feedback as well including requested functionality changes, and the need for ASX to complete aspects of its own readiness.

ASX has also said it will seek user input on the new schedule that will move the go-live date from April 2021 to a later date. In the meantime, the target of opening an Industry Test Environment (ITE) in July is retained.

In a statement by ASX Deputy CEO Peter Hiom (at the time) of the ASX said it is again planning the implementation of the CHESS replacement system.

“We are conscious of the importance of providing a new schedule, and the need to get the valuable input of CHESS users. Right now, however, in this environment of heightened volatility and activity levels, the industry needs to focus on day-to-day operations. We will, therefore, wait until June to consult on the new timetable when we expect everyone will have more time to consider the replan and better assess the implications of COVID-19. We will then announce the new schedule.”

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