COVID-19 virus forces ASX to push back CHESS post-trade replacement 

The Coronavirus pandemic has forced the ASX to delay the planned April 2021 implementation of its blockchain-based equities post-trade platform. 

By Joe Parsons

The Australian Securities Exchange (ASX) has announced a delay for the replacement of its CHESS equities clearing and settlement platform due to the uncertainty created by the COVID-19 pandemic.  

ASX had planned to go live with a new distributed ledger technology (DLT)-based post-trade platform in April 2021. The exchange will now launch a consultation in June with the securities industry to agree on a new date. 

“We are conscious of the importance of providing a new schedule, and the need to get the valuable input of CHESS users. Right now, however, in this environment of heightened volatility and activity levels, the industry needs to focus on day-to-day operations,” said Peter Hiom, deputy CEO, ASX.  

“Our priority is to ensure the orderly and safe completion of this project with the continued close oversight of our regulators. We thank everyone for their ongoing support during this re-planning process. 

The ASX said the re-plan will provide additional time for users to complete their operational readiness activities and to consider the rule changes that accompany the new system. It will also increase the time available for back-office software developers to familiarise themselves with key aspects of the new system in a production-like testing environment, and enable them and ASX to complete software development and testing. 

In the meantime, ASX said the opening of an Industry Test Environment (ITE) for developers in July this year will be retained.  

“ASX remains fully committed to CHESS replacement. We continue to progress the project, including system development and testing, supporting back office software developers, and assisting users in their readiness activities. The investments we are making in the new system and in distributed ledger technology are for the long-term benefit of the financial services industry and the Australian economy,” Hiom added. 

The ASX had previously pushed back the go-live of its blockchain-based post-trade equities platform, which was originally scheduled for the fourth quarter of 2020, after industry feedback raised concerns on the exchange’s timeline to implement the technology.