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ASX seeks to switch to DLT settlement system in 2020
The Australian Securities Exchange (ASX) has announced the blockchain-based system which is going to replace its Clearing House Electronic Subregister System (CHESS) will be launched somewhere between Q4 2020 and Q1 2021.
ASX currently uses CHESS to record shareholdings and manage the clearing and settlement of equity transactions in Australia. In early 2016, it selected Digital Asset to replace CHESS with a next-generation post-trade platform using cutting-edge technology.
ASX has now outlined a draft plan for the implementation of the replacement system based on Digital Asset’s distributed ledger technology (DLT). This follows a two and a half year assessment of DLT, it said, adding that it conducted an extensive stakeholder engagement process as well.
“ASX will replace CHESS with a post-trade solution that provides users with more efficient clearing, settlement and other post-trade services through improved record keeping, reduced reconciliation, more timely transactions, and better quality data. The new system incorporates a permissioned distributed ledger that will provide benefits for users”, the consultation paper reads.
According to draft outline, the indicative go-live window for the new system is Q4 2020 to Q1 2021 with migration testing scheduled to commence in June 2020. ASX said that the timing of implementation is subject to change following the consultation process and will provide further updates in late July 2018.