The Australian Stock Exchange’s blockchain-based replacement for its clearing and settlement system CHESS has been delayed for a fourth time.
The delay was announced in a project update on Monday and is the result of software release v1.3 not being received as scheduled from the project technology provider Digital Asset.
The delay means the project’s ability to meet the target to go-live in April 2023 just got harder. The project update from ASX group executive for securities and payments Tim Hogben says that “there is a strong likelihood of delay to the go-live date” and that further updates to the project schedule will be communicated to the market.
“We recognise the impact these changes will have on our customers’ programming activities and apologise for the inconvenience. We will be actively working with all stakeholders to assess the flow-on impacts of these schedule changes to project milestones, industry testing, operational readiness, migration dress rehearsals and implementation (go-live),” the update says.
In particular, the timeline for commencing the accreditation process for software vendors. If it the update was received on schedule, accreditation could begin from the end of April, but is now expected to commence from the end of July or August, depending on the type of market participants the software is servicing.
In the meantime, the update says that “software providers will continue to work through testing (on v1.2) in Industry Test Environment 1 (ITE).” The ITE allows testing of the CHESS replacement system across industry before going live.
Following the commencement of accreditation in ITE1, CHESS user testing will begin following the test and deployment of v1.3 in ITE2. This also means that migration dress rehearsals that were scheduled to begin in October will be pushed back.
Onboarding to ITE2 will open on April 27, rather than April 18 to accommodate the Easter and Anzac day public holidays, according to the update.
Software release v1.3 was supposed to include a number “non-functional tuning of the application and code fixes identified by customers, and a software candidate for providers to accredit against.”
Technical accreditation ensures that software connecting to the CHESS replacement system complies with functional and non-functional requirements. This ensures that software can maintain a stable connection with the CHESS replacement. Such accreditation does not automatically imply compliance with ASX rules and procedures.
Classified as distributed ledger technology, development on the CHESS replacement system began in 2016 when New York-based Digital Asset was named technology partner to develop a prototype, with work on the project properly beginning at the end of 2017.
Its initial go-live date was for April 2021, but in 2020 this was pushed back twice, first to April 2022, and again to April 2023.
The original CHESS system was first fully operation in 1998 and fully digitised trade clearing and settlement on the ASX. In 2015, the ASX first announced it would seek a blockchain-based replacement for CHESS.
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