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ASX completes reassessment of solution design to replace CHESS



The Australian Securities Exchange (ASX) has completed its reassessment of the solution design to replace CHESS. The solution will be delivered by global technology provider TATA Consultancy Services (TCS).

As reassessment is now complete, ASX will move on to the next phase of its design and implementation plans, with further stakeholder consultation to commence in the first quarter of 2024.

ASX has partnered with TCS for the delivery of its TCS BaNCS for Market Infrastructure product, which offers a technology platform for clearing and settlement services.

The product can meet licence obligations of ASX Clear and ASX Settlement, and is capable of supporting potential new services and innovation from ASX or other providers.

TCS supports direct holding structures, which ASX says should minimise the amount of customisation required to support the Australian market.

ASX proposes to implement the new platform in two main releases, with the clearing service to be delivered in a first release, and the settlement and sub-register services to follow in a second release.

This staged approach is expected to reduce overall delivery risk and should help manage impacts on industry stakeholders, as compared to a single cut-over approach.

The expected timeframe for the implementation of the first release (the clearing service) is 2026.

The estimated cost for this part of the project is between AUD $105 and $125 million, to be incurred over multiple years.

ASX expects the scenarios for the second release (the settlement and sub-register services) to be considered for implementation in 2028 or 2029.

The delivery timeframes are subject to a number of factors, including stakeholder consultation and planning.

ASX has also entered into an agreement with Accenture to support ASX’s project delivery in the role of solution integrator. Accenture will provide additional capability and capacity in technology project delivery and industry expertise.

The ASX announced a reassessment of CHESS after it faced industry criticism in 2022 to pause its CHESS replacement project, as part of a plan to “reassess all aspects” of the planned update.

The decision followed ASX’s own internal assessment and the completion of an independent review, conducted by Accenture. The independent report identified significant challenges with the solution design and its ability to meet ASX’s requirements.

Helen Lofthouse, managing director and CEO of ASX, comments: “When we took the decision to reassess the CHESS replacement solution design, we wanted to select a solution that would serve the whole market, and to do that we needed extensive input from our customers and industry stakeholders. We significantly increased engagement during 2023 and the selected product, implementation approach and scope reflects discussion and feedback from various forums.

“We had clear objectives for our selection process. These included meeting current and future market needs and our licence obligations, enabling a safe transition from the incumbent platform, minimising industry impacts where possible, and having the capability to provide interoperability and facilitate future innovation as driven by market demand.”

She adds: “This next phase of the project will be a multi-year undertaking and ASX will maintain our investment in the current CHESS platform to ensure it continues to operate efficiently and reliably until the replacement is implemented.”

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