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The Australian Securities Securities Exchange (ASX) has built the world’s first true industrial-scale blockchain use case: a new post-trade solution to replace its legacy Clearing House Electronic Subregister System (CHESS) platform, which is in operation for about 25 years.
While delivering the organization’s financial results in February, ASX CEO Dominic Stevens said the system would be ready for industry-wide testing in July and that full functionality could arrive by April 2021.
However, in March, the ASX announced that it had revised the implementation schedule for CHESS replacement and would consult with CHESS users following the COVID-19 pandemic.
The ASX then said in June that it would revise its target go-live date until April 2022.
Wednesday revised the target to April 2023.
“While the majority of CHESS users indicated they could meet the proposed go-live date of April 2022, many asked for more industry testing, more time to prepare for the new system, and additional features that reduce manual processes (such as electronic elections for company shares) to be delivered as soon as possible, “the ASX said in a statement.
“Stakeholder feedback and ASX experience show that COVID-19 continues to impact the industry. This includes the effect on collaboration and productivity, the importance of digitization processes, and the need to further reduce the risk of cutover for the new CHESS system. “
See also: The Australian Securities Exchange is investing in more than just blockchain
The ASX said the industry also required substantially more post-trade processing capacity than expected prior to COVID-19.
According to the exchange, this is in response to extreme increases in trading volumes on the ASX platform during the pandemic. The ASX said early March saw an “unprecedented” explosion in daily trading volumes, eclipsing previous records of around 3.5 million trades from historic highs of less than 0. , 5 million transactions.
“This increase has reset the expectations of the industry and regulators on the possibility of further increases in daily trading records. The need for the replacement system to scale to much higher levels of processing and earlier is now a requirement of the former. day, “he said.
Stevens said that due to the delay, CHESS would be a “greatly improved” replacement solution.
“By its nature, a consultation process that considers all industry feedback will not satisfy everyone. We recognize those who worked hard and would have preferred faster turnaround times,” said Stevens.
“However, the replacement of CHESS is an important and innovative project, with significant long-term benefits for users of the Australian financial market. It is the responsibility of ASX to deliver it in a safe and timely manner and to consider the feedback from all our stakeholders. We thank everyone. our industry participants, who are working in partnership with us to ensure the successful delivery of the new system, as well as the ongoing commitment of our regulatory agencies. ”
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