The Australian Securities Exchange (ASX) has cancelled a technology overhaul that was intended to replace its core trading service, the Clearing House Electronic Subregister System (CHESS), with a blockchain-based system.
The Australian Securities Exchange (ASX) has issued an apology for pulling out of a multi-year plan to upgrade its clearing and settlement system.
This decision was made “in light of the solution uncertainty,” according to the statement, and it will result in a charge of AUD $245-255 million pre-tax ($172-179 million after tax), which the company has written off.
The independent audit that was conducted by Accenture found problems and “significant challenges” with the design of the blockchain system. These problems include a lack of clarity regarding the way in which ASX requirements interact with the application and underlying ledger.
The Chair of the ASX, Damian Roche, stated that “We have come to the conclusion that the path we were on will not meet the high standards of both the ASX and the market.” There are significant challenges that need to be addressed in the areas of technology, governance, and delivery.
In order to replace its CHESS system, which had been in use for the past 25 years and was used to record shareholdings and manage transaction settlements, ASX had been working on a distributed ledger technology (DLT) solution. The year 2020 was originally planned to mark the launch of the system; however, it has been plagued by many delays over the years.
Compiled by Coinbold