T Skevington and M Bacina
COVID-19 causes CHESS replacement delays at ASX
In an announcement on Wednesday, 25 March 2020, the Australian Securities Exchange (ASX) postponed the launch of its much anticipated distributed ledger technology (DLT) replacement for the ageing CHESS clearing and settlement system, due to the ongoing effects of the COVID-19 (coronavirus) outbreak.
In light of the growing spread of coronavirus in Australia and deteriorating economic conditions, ASX Deputy CEO Peter Hiom said the ASX's immediate priority is to monitor the situation on a daily basis and "focus on day-to-day operations." Commenting on the delays to the implementation timetable, Hiom commented that the ASX felt it needed:
more time to consider the replan and better assess the implications of COVID-19,
The new key indicative dates are as follows:
Consultation on new schedule June 2020;
Industry Test Environment (ITE) optionally open for developers July 2020;
ITE open for all users October 2020, subject to June consultation;
Tranche 2 rule consultation deadline moved from 3 April to end of May;
Other key milestones including go-live subject to June consultation.
The launch of the the ASX DLT was originally scheduled for Q1 2020, before being postponed to Q2 2021. More recently, the ASX's annual report, published August 2019, stated that the DLT was "on track for go-live in March-April 2021". Of course, no one anticipated in the comparably idyllic August 2019 the disruptions that would be caused by coronavirus.
Despite the delay, Hiom emphasised that:
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