ASX resets go-live date for CHESS replacement system
ASX today announced an increase of the scope of CHESS replacement and reset the go-live date to April 2023.
The Exchange is replacing CHESS, its well-functioning but ageing clearing and settlement system, with enhanced technology that will create new opportunities for the Australian market. When it goes live, the new system is set to offer richer functionality, adopt global standards and use contemporary technology.
It will also provide the option of accessing distributed ledger technology (DLT), which will deliver information more efficiently and stimulate competition by enabling anyone to build new services.
Today, ASX confirmed the new go-live date for the CHESS replacement system as April 2023, with increased project scope and a 12-month extension to the proposed date consulted upon mid-year. While most CHESS users indicated they could meet the proposed go-live date of April 2022, many asked for extra industry testing, more time to prepare for the new system and additional functionality that reduces manual processes (such as electronic corporate action elections) to be delivered as soon as possible.
The feedback from stakeholders and ASX’s own experience show that COVID-19 continues to have an impact on the industry. This includes the effect on collaboration and productivity, the importance of digitising processes and the need to further reduce cutover risk to the new CHESS system.
The industry also requested substantially more post-trade processing capacity than what had been contemplated pre-COVID-19. This is in response to the extreme increases in trading volumes on the ASX platform during the most volatile period of the pandemic in March 2020.
This period saw unprecedented ‘bursting’ of daily trade volumes, with additional trades in early March beating previous records by approximately 3.5 million trades, compared to historical bursts of less than 0.5 million trades. This increase has reset industry and regulator expectations about the possibility of further step increases in daily trading records. The need for the replacement system to scale to much higher processing levels and sooner, is now a Day 1 requirement.
As a result, ASX has adjusted the Day 1 scope and schedule for the CHESS replacement system to target significantly more throughput capacity and scalability, more functionality, more industry testing, and more time for users and ASX to prepare.
Prior to the implementation of the CHESS replacement system, ASX will continue to invest in the current CHESS system, including strengthening its resilience, capacity and processing efficiency.