ASX releases consultation paper on its proposed blockchain-based replacement to CHESS

By Jim Bulling and Felix Charlesworth

On 27 April 2018, the Australian Securities Exchange (ASX) released a consultation paper seeking industry feedback on its proposed implementation and development of a blockchain-based system to perform clearing, settlement and other post trade services in the Australian equity market. As previously mentioned, it is intended that this new platform will replace the existing Clearing House Electronic Sub-Register System (CHESS) which has been used by the ASX since 1995.

Following the previous round of consultation, the ASX has identified 50 business requirements advanced by industry working groups in late 2017 which includes reporting, pre-settlement and account information requirements for the new blockchain-based system.

The consultation paper also provides the following indicative timeline for the implementation of the new system:

  • users will have access to externally available test environments of the blockchain-based system from Q2 2019;
  • industry wide testing to be conducted by Q1 2020;
  • migration testing of the system will begin by Q2 2020; and
  • Go-Live’ date for the new blockchain system to begin operating is estimated to commence somewhere between Q4 2020 and Q1 2021.

In light of the above information outlined in this paper, the ASX is seeking feedback on the following:

  • whether there any other important business requirements for the blockchain-based system that have not been captured in the consultation paper;
  • the adequacy of the indicative timeline for the implementation of the blockchain-based system;
  • any other information that users and other stakeholders require to assist them with their own transition planning.

The ASX invites users and other stakeholders to make written submissions to by 22 June 2018.

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