The Australian Stock Exchange’s blockchain replacement for clearing system CHESS has been delayed again – for the fifth time – as the multinational tech consultants Accenture is brought in for an independent review.
A spokesperson for the Australian Stock Exchange (ASX) said on Wednesday “more development is required than previously anticipated to meet ASX’s scalability and resilience requirements for the application”.
ASX does not expect the go-live date for the system to be before late 2024, with a more specific date to be determined following Accenture’s review, which will be published publicly.
The review will focus on the new CHESS application software provided by New York-based application software provider Digital Asset. The blockchain platform provided by VMware and other infrastructure that underpins the CHESS replacement system will not be included in the review.
The Australian Securities and Investment Commission (ASIC) and the Reserve Bank of Australia (RBA) have welcomed the appointment of Accenture to the review but expressed disappointment at the further delay. The regulators also expect ASX to continue to support the existing CHESS system until the replacement system can go live.
The Accenture review will be a part of the ASX’s Assurance Program, which will be reviewed by an independent expert in line with ASIC licence conditions imposed in November 2021. The independent expert is multinational consulting firm EY.
ASX managing director and chief executive Helen Lofthouse, who started in the role on Monday, said there has been “significant” progress with the CHESS replacement but that it was important to undertake a “careful” review of both the completed and remaining work.
“CHESS is a critical system and we must have high confidence in the schedule to deliver new CHESS safely,” Ms Lofthouse said.
“I know our customers will be as disappointed as I am with the uncertainty about the timeline for completion. I apologise for the uncertainty and thank them for their close and constructive work with us on this important project.
“ASX continues to invest in the existing CHESS system, and has already significantly strengthened its capacity, speed and resilience to cater for the increased trading activity in recent years. Existing CHESS remains secure and stable and continues to perform well as we transition to a replacement CHESS system.”
ASIC chair Joseph Longo said that given the delays and duration of the CHESS replacement project, Accenture’s review will be important in providing assurance the system will be delivered and provide a go-live date with a high degree of confidence. RBA governor Philip Lowe similarly said that the review was important in providing assurance that the new CHESS replacement is fit for purpose.
Digital Asset began development on the CHESS replacement project at the end of 2017. The initial go-live date was for the end of 2020, but this was moved to March-April 2021 in September 2021.
In 2020 this was pushed back twice, first to April 2022, and again to April 2023. In March, the ASX announced it would be unable to meet the April 2023 go-live date.
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