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ASX pledges to implement CHESS review recommendations by mid-next year

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A “detailed and comprehensive plan” has been released by ASX which it says addresses all of the recommendations of an external review into the CHESS replacement program.

ASX has confirmed that it intends to implement all 45 recommendations from an external review into aspects of its troubled CHESS replacement program by June 2024.

Alongside its full-year results on Thursday, ASX published a special report covering its response to the 45 recommendations made by Accenture in an external review report last year.

Accenture identified a number of significant challenges with the CHESS replacement solution’s design and its ability to meet ASX’s requirements, which led ASX to pause its program.


ASX noted that it had accepted and was implementing all of Accenture’s recommendations and said many of these had been extended to be addressed on an enterprise-wide basis.

“ASX had already been undertaking work to uplift delivery capability across the organisation and these actions will lead to further improvements in de-risking project delivery, enhanced arrangements for predictable change, and better alignment between ASX and its vendors,” commented ASX managing director and chief executive officer Helen Lofthouse.

In its special report, which was produced in response to a notice from the Australian Securities and Investments Commission (ASIC) in February, ASX said it had determined 93 actions it will take across the 12 focus areas highlighted in the external review report.

According to ASX, these actions will enable an uplift in its framework and capabilities and lead the market operator to achieve a number of key business outcomes.

These include de-risking project delivery, improving capabilities that contribute to project delivery, enhancing project outcomes for stakeholders, providing greater detail and traceability in project planning, better alignment between ASX and vendors, and a “cultural shift” in delivery.

“ASX’s actions to address the recommendations in the external review report have commenced and implementation will occur in a staged way through to June 2024,” it explained.

“Each of the responses to the recommendations in the external review report will be observed, inspected, and tested by Ernst & Young (EY).”

ASX noted that it had established the “Delivery Excellence 2 Project” (DE2) in order to respond to the findings and recommendations contained in Accenture’s review.

“The achievement of these actions and the completion of ASX’s DE2 Project will lead to an improvement in ASX’s project practices and enhance ASX’s arrangements for ensuring predictable change, high-quality delivery, and optimised velocity,” the market operator said.

ASX’s special report was subject to an independent audit by EY, which determined that the report met the requirements of the relevant notices issued by ASIC in February.

Forty-two of the 45 recommendations were fully addressed by ASX’s response plan, according to EY, while evaluation of the remaining three was “inconclusive” due to limited information available.

EY also outlined four recommendations to support the “timely, quality delivery” of the ASX response plan. Among these are that ASX should clearly define deliverable templates with its team and leadership within the first phase of the project to limit rework later in the program.

Additionally, in terms of the plan to address all recommendations using defined tasks and actions, EY recommended that ASX “re-evaluate staffing, detailed tasks, and the overall timeline to determine whether the published response plan schedule can be supported”.

ASIC’s notices also require ASX to produce a “PPPM Special Report” covering current portfolio, program, and project management frameworks and an assessment of those frameworks against internationally recognised standards.

“Together, the reports will assist ASIC in its assessment of whether any further regulatory action is required, including ASIC’s regulatory options, to ensure that ASX Clear and ASX Settlement adhere to the regulatory expectations and comply with its clearing and settlement facility licence obligations,” the regulator said.

Earlier this month, ASX announced that former ASIC chair Alan Cameron will lead a new stakeholder group established by ASX to advise ASX Clear and ASX Settlement on strategic clearing and settlement issues, including the governance of the CHESS replacement project.

In June, ASX also detailed its arrangements for supporting and maintaining CHESS to ensure it remains operationally reliable until a replacement solution is implemented.

Jon Bragg

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.