ASX delays CHESS replacement until April 2023

The Australian Stock Exchange (ASX) has pushed back the CHESS replacement date by another year to April 2023.

CHESS is the Clearing House Electronic Subregister System, the computer system which the ASX uses to manage settlement and keep track of shareholdings.

The ASX announced it has increased the scope of the project as a result of COVID-19 following industry consultation.

Many stakeholders the ASX consulted have raised concerns about the lingering impact of the pandemic and their ability to cope with trading volumes. Many are requesting more testing.

Early March 2020 saw an "unprecedented bursting of daily trade volumes", eclipsing previous records by approximately 3.5 million trades, compared to historical bursts of 0.5 million trades, the ASX said.

"This increase has reset industry and regulator expectations about the possibility of further step increases in daily trading records. The need for the replacement system to scale to much higher processing levels and sooner, is now a Day 1 requirement."

This is the second time the ASX has delayed the switch to distributed ledger technology (DLT), which was originally slated to go live in April 2021 and then pushed back to April 2022.

Despite the setbacks, ASX chief executive Dominic Stevens said replacing CHESS is an important and innovative project, with significant long-term benefits for Australia's financial market users.

"It is ASX's responsibility to deliver it in a safe and timely manner, and to consider the feedback from all our stakeholders. We thank all our industry participants, who are working in collaboration with us to ensure the successful delivery of the new system, as well as the ongoing engagement of our regulatory agencies," he said.

In the meantime, the ASX said it continues to invest and develop CHESS.

This article first appeared on Financial Standard

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