The Australian Securities Exchange (ASX) stated on Tuesday, September 4, 2018, that it will delay its transition to blockchain technology by six months to allocate more time towards user development and testing.
ASX Extends Timeframe
According to Reuters, the ASX announced in 2017 that it would replace its existing Clearing House Electronic Subregister System (CHESS), the current platform used for clearing, settlement, and other post-trade services for Australia stocks, with a blockchain-based system. The ASX has pushed back the launch date of the blockchain platform from the last quarter of 2020 to March-April 2021.
According to the CHESS Replacement Scope and Implementation Plan, while there was a lot of encouragement and support for the new blockchain-based system, there was also a lot of concern as to whether the proposed implementation window and the launch date was achievable.
The concern was derived from all the new changes being introduced. “Many respondents considered the proposed timeline to be ambitious given the extent of the new features to be included as part of the Day 1 scope.”
In regards to the Feedback, the ASX has modified their plans and will defer implementation of seven new scope items from Day 1 to post-Day 1. The company will also defer commencement on industry-wide testing by six months and extend mandatory accreditation by six months. These new changes are a result of industry feedback on a paper the ASX released in April 2018.
The ASX received 41 written submissions which represented the views of settlement participants and industry associations representing issuers, brokers, custodians, and share registries.
When it comes to transitioning from the CHESS to the blockchain-based system, the switchover will be on a single cut-over date then a phased rollout. The ASX will need to undergo rigorous and stringent testing procedures to ensure that there will be minimal disruptions.