ASX Postpones Long-Awaited CHESS Replacement – Again
The highly anticipated overhaul of the Australian Securities Exchange’s (ASX) clearing and settlement technology has faced further delays, with the exchange announcing this week that the April 2023 “go-live” date is “no longer viable”.
The replacement for the Clearing House Electronic Subregister System (CHESS) incorporates distributed ledger technology to enable instant transactions and automated real-time records.
ASX’s $250 million project, billed as the “costliest and oldest blockchain project”, was first expected to be ready for industry-wide testing in July 2020 and fully functional by April 2021. This date was later postponed to April 2022 and pushed back again to April 2023.
This week’s announcement comes after the ASX informed CHESS users, software vendors and stakeholders of the high likelihood of a delay just over a month ago.
A new “go-live” and hopefully a final date is still in question and should be announced after June.
Stakeholder input to establish a new deadline
ASX has confirmed that it will rely on “stakeholder input” to achieve a new deadline and project milestones, which will include industry testing, operational readiness, market testing and ultimately the technology implementation.
The exchange remains confident in the proposed replacement for CHESS to “balance security and efficiency”, but insists that the existing CHESS system is “robust” and “works well”.
Ongoing issues forcing continued delays
A number of role changes in the ASX have been identified as contributors to the continued delays.
ASX Deputy Managing Director and Head of Group Business Development Peter Hiom, head of the project himself, resigned last year after 23 years and was replaced by Tim Hogben who took on the role of Group Director. ‘ASX.
ASX chief executive and chief executive Dominic Stevens also announced he would be retiring, prompting Ord Minnett chief executive Karl Morris to note that replacing Mr Stevens would likely bring a different approach to the project, which could lead to further delays.
“I wouldn’t be surprised if there were any significant different decisions when a new chief executive takes over,” Mr Morris said.
ASX uses its monopoly to buy time
Morningstar analyst Gareth James says the ASX’s continued delays in transitioning points to the exchange are acting “monopolistically.”
“ASX has this incredibly strong monopoly that hurts business innovation and efficiency,” he said.
Mr James is not surprised to see the ASX implement further delays, saying “operational issues” are causing people to leave the company.