The ASX has announced a new commencement date for the implementation of blockchain technology after an extensive consultation with industry insiders and stakeholders.
The ASX unveiled the new plans in their paper CHESS Replacement: New Scope and Implementation Plan which was written after a consultation period where they received 41 submissions from stake holders.
The primary securities exchange announced in December 2017 that it would replace CHESS, the software used for the clearing and settlement of equity transactions with a distributed ledger, commonly referred to as blockchain, solution.
The decision follows almost three years of testing and building enterprise-grade blockchain software with US distributed ledger company Digital Asset.
The replacement of CHESS onto the new software has now been pushed back from Q4 2020 and the ASX is now targeting March-April 2021 for commencement.
An additional six months will be provided for user development and testing and extend mandatory accreditation by six months.
Implementation of seven scope items will be delayed to post commencement and one requirement will be brought forward to the Day 1 commencement date in response to feedback.
The item being brought forward is the linking of bilateral settlements and the items to be deferred are certain settlement and pre-settlement functions.
“We do not underestimate the challenge to replace CHESS and transition the market to the new system. ASX’s dedicated CHESS replacement project and technical account management teams will support users through this critical industry-wide change program,” said the ASX in the paper.
“There will continue to be significant collaboration with stakeholders over the entire project. ASX will ensure that further technical information, support and systems environments that customers and their vendors will need to connect to the new system are provided with sufficient lead times.”
The switchover to the new system will take place of a single weekend which will be announced by the ASX closer to the time.
“ASX remains of the view – informed by previous experience transitioning critical market infrastructure systems – that the single cut-over weekend is the most appropriate solution and is lower risk than other alternatives such as running multiple systems in parallel.”
The 2017–18 financial year saw the security exchange’s profits rise by 2.5 per cent to $445 million.
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