- The Australian Securities Exchange has delayed the rollout of a blockchain settlement system designed to replace its current system, CHESS.
- The launch of the CHESS replacement system has been impacted by the COVID-19 pandemic.
- The delay gives ASX opportunity to dedicate more development resources to the system.
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The Australian Securities Exchange (ASX) has announced that it is delaying the launch of a blockchain settlement system intended to replace CHESS, its clearing, settlement and asset registration system. The postponement follows a previously proposed delay to April 2022, suggested four months ago as a public consultation was opened.
In June of this year, the Australian Securities Exchange experienced a spike in trading volumes as a result of the ongoing COVID-19 pandemic. As a result, the exchange needed to take a different approach to scaling demands on the CHESS replacement system, adding to the scope of the project and thus extending the timeline for delivery.
The CHESS system refers to the Clearing House Electronic Subregister System, which facilitates the clearing and settlement of trades in shares, and provides an electronic subregister for shares in listed companies.
“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,” said Dominic Stevens, CEO of ASX.
As a result of the delay, the CHESS replacement system is now receiving more development attention.
“The functional scope, capacity, scalability and testing of the CHESS replacement system now being developed is greater,” Stevens said, adding that the system’s development “captures the increased requirements of ASX and the industry, and lowers the risk in delivering them.”
Moreover, the additional development time will allow ASX to address regulatory requirements.
“It is also consistent with ASX addressing the expectations of the regulatory agencies that CHESS be replaced as soon as it can be achieved safely and that the new system meets the market’s needs,” he added.
However, the CEO also took the time to recognize any frustrations experienced by stakeholders awaiting rollout. “We acknowledge those who have been working hard and would have preferred a faster delivery time,” Stevens said.