ASX delays blockchain transition until 2023
ASX has confirmed the new go-live date for the CHESS replacement system as April 2023, with increased project scope and a 12-month extension to the proposed date consulted upon mid-year.
This follows careful consideration of the feedback from the 100 organisations that participated in the extensive industry consultation, engagement with regulatory agencies, detailed discussions with our technology partners, and completion of a comprehensive project review.
While most CHESS users indicated they could meet the proposed go-live date of April 2022, many asked for extra industry testing, more time to prepare for the new system and additional functionality that reduces manual processes (such as electronic corporate action elections) to be delivered as soon as possible.
ASX experienced two volume spikes in January and March 2020 partly shown on this graph:
- Around 3.5m trades in January
- Around 7m trades in March
OTC Space comment: Whilst the CHESS platform is intended to process the Australian equity market, this might become the first large scale DLT deployment for clearing, and if successful could open a path for clearing of other markets.
Summary of ASX’s response
As a result of the CHESS user feedback and the industry demand for additional capacity following the extreme volume increases in March 2020, ASX has identified the following key changes to the scope and revised timetable for implementing the new system that was published for consultation on 30 June 2020:
Redesigning the current NBO process to significantly improve the scalability of overnight processing
Delivering significantly more intra-day throughput capacity on Day 1
Adding digitisation functionality in the Day 1 scope - corporate action dividend reinvestment plan (DRP)/ bonus share plan (BSP) elections and DRP/BSP enquiry, plus non-batch DvP bilateral settlement functionality - that was previously scheduled as part of release 1.1
Providing for additional CHESS user testing – greater coordinated testing and market-wide performance and migrated data testing to reduce risks in cutting over to the new system
Providing more time for software providers’ development, testing and readiness activities to reduce delivery risk
Extending the period of operation and enhancing the CDE to improve the software provider experience
Providing more time before opening ITE with a fully functional system with significantly higherthroughput capacity, to reduce delivery risk and improve the customer experience
Avoiding project overlap, resource contention and the systems impacted by scheduling away from the SWIFT annual standards release in November each year, key milestones for the ISO 20022 cross-border payments, RTGS migrations, and the AGM season.
- ASX announcement PDF: ASX Announces New Scope and Go-Live Date for CHESS Replacement
- ASX CHESS new timeline and further details: http://www2.asx.com.au/content/dam/asx/documents/unlinked-docs/chess-replacement-project-response-to-consultation-revised-implementation-timeline.pdf