Upgrade from CHESS hit with more delays

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But on Tuesday, the ASX said the removal of the CDE10 software was delayed.

This delay runs counter to comments made to The Australian Financial Review in June by the executive of the ASX group, securities and payments, Tim Hogben, who is in charge of replacing CHESS.

An ASX spokesperson said the software code change was less about delaying CDE10 and more about “combining the two remaining original software – CDE10 and CDE11 – into one final version: CDE10”.

“Therefore, the scope of this final version has changed significantly,” he said.

Scope changes have been an insignificant feature of the CHESS replacement project since it began with a consultation paper in 2018.

The initial plan did not foresee an increase in transaction volumes. Following a strong rotation on March 13 of last year, the scope was changed, so there was no cap on the volume traded.

The project continued for two years before the inclusion of netting and settlement, resulting in significant changes in the scope of the project over the past year.

The complexity of the project is clear from the 865 pages of rule changes released by ASX on Tuesday. This document includes changes to clearing and settlement.

An ASX spokesperson said the latest software drop in September would be the biggest since the customer development environment opened in April 2019.

He said the ASX was on schedule for the industry’s first test environment at the end of November.

The latest drop would highlight a number of characteristics of corporate actions, including choices of dividend reinvestment plans and bonus share plans.

ASX also delayed the release of its failover and recovery guide from Tuesday until the end of September, and it delayed the release of the CHESS user interface user guide until the end of October.

At a Senate committee meeting last week, Liberal Senator Paul Scarr asked Australian Securities and Investments Commission Chairman Joe Longo to consider appointing an independent third party to review the methodology of ASX test for CHESS replacement.

ASX’s management of clearing and settlement will be subject to further scrutiny in late September, when the Reserve Bank of Australia releases its annual assessment of clearing and settlement.

The scale of the risk management and operational execution tasks that ASX faces was made clear on Tuesday when a convenient one-page, color-coded timeline for CHESS replacement, including the date of each step of the project, has been sent to Computershare customers.


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