The financial turmoil caused by the unfolding COVID-19 pandemic has forced the ASX to delay the launch of its blockchain-based CHESS replacement, which had been scheduled to go live in April 2021.
The ASX announced yesterday it will conduct a formal consultation process in June to determine a new timetable for the project.
The system development is continuing and an industry testing environment is still scheduled to open in July this year for developers.
The delay will also allow time for the ASX to implement requested functionality changes and to complete some of its own development and readiness activities.
Prior to the COVID-19 outbreak, the ASX had already been considering extending the timeline. However, in recent days the ASX said it had received feedback about the ability of users to focus on the CHESS replacement project during this period of heightened volatility and activity levels.
Many firms in the industry, including ASX, are operating with a large proportion of staff working from home and the ability to participate in coordinated readiness activities later this year is unclear.
“We are conscious of the importance of providing a new schedule, and the need to get the valuable input of CHESS users. Right now, however, in this environment of heightened volatility and activity levels, the industry needs to focus on day-to-day operations,” said Peter Hiom, Deputy CEO of the ASX.
“We will therefore wait until June to consult on the new timetable when we expect everyone will have more time to consider the replan and better assess the implications of COVID-19. We will then announce the new schedule.”
The long-running project began in 2015 when the ASX decided to replace its 25-year-old CHESS stock-clearing system with a system based on the distributed ledger technology.
“ASX remains fully committed to CHESS replacement. We continue to progress the project, including system development and testing, supporting back office software developers, and assisting users in their readiness activities. The investments we are making in the new system and in distributed ledger technology are for the long-term benefit of the financial services industry and the Australian economy,” Hiom said.
- By conducting the consultation in June, the ASX hopes participants will have enough time to assess the implications of COVID-19.
- The ASX is still targeting to open the Industry Test Environment (ITE) in July, which will be offered to backend software developers. This will enable them to complete their connectivity, testing and readiness activities as ASX finalises development of the system.
- The ASX is also aiming to open the ITE to all users in October 2020.
- Technical accreditation is scheduled to commence at the end of January 2021.
- The go-live date will be later than April 2021.