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The Australian Securities Exchange’s (ASX) long-awaited plans to use blockchain to bring its clearing and settlement system into the 21st century have just been called off.

In a Nov. 17 statement, ASX said it had suspended all ongoing activities on its “CHESS replacement project” following an independent review by technology consultancy Accenture, which identified significant challenges with the design of the solution and its ability to meet the requirements of ASX”. indicating:

“Ongoing activities on the project have been halted while ASX reviews the solution design.”

Since five years, ASX had worked on a distributed ledger technology (DLT) which would replace its 25-year-old Clearing House Electronic Subregister System (CHESS), used to register holdings and manage trade settlements.

The system was originally supposed to launch in 2020, but the project has been marred by multiple delays over the years, with the ASX saying it needs more time to testhad uncertainty around COVID-19necessary more time for development, capacity revisionsand even more testing before it is posted online.

Among the findings of its 47-page report, Accenture said enterprise workflows are “not suitable for a distributed environment,” the DLT-based system was too complex, and the timeline for completion was uncertain. , whether the application software is over 60% complete.

ASX Chairman Damian Roche apologized for the disruption, adding “there are significant technology, governance and delivery challenges that need to be resolved.”

Helen Lofthouse, Managing Director and CEO of ASX, said “it’s clear we need to redesign the solution”, adding “we have work to do before we update and consult with stakeholders more thoroughly. “.

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The announcement drew criticism from the Australian Securities Investment Commission (ASIC) and the Reserve Bank of Australia (RBA) – the country’s financial markets regulator and central bank respectively – which published a joint statement on the subject.

RBA Governor Philip Lowe called the ASX announcement “very disappointing” and ASIC Chairman Joe Longo said the ASX “has failed to demonstrate control appropriateness of the program to date, which has undermined legitimate expectations that the ASX can deliver a contemporary world-class financial system.” market infrastructure.

Both organizations outlined their expectations saying that the CHESS replacement must be operational before the current system no longer meets requirements and “market and service continuity is ensured” by the current system.

The ASX must also “elevate its capabilities” and address “the serious shortcomings identified by the independent report” starting with creating a plan to address them.

The ASX said the project had accrued a pre-tax charge of between $164.6 million and $171.3 million (A$245-255 million).