After extensive industry consultation and a comprehensive project review, ASX increases the scope of CHESS replacement and resets the go-live date to April 2023. ASX has confirmed the new go-live date for the CHESS replacement system as April 2023, with increased project scope and a 12-month extension to the proposed date consulted upon mid-year.
This follows careful consideration of the feedback from the 100 organizations that participated in the extensive industry consultation, engagement with regulatory agencies, detailed discussions with our technology partners, and completion of a comprehensive project review. While most CHESS users indicated they could meet the proposed go-live date of April 2022, many asked for extra industry testing, more time to prepare for the new system and additional functionality that reduces manual processes (such as electronic corporate action elections) to be delivered as soon as possible.
The feedback from stakeholders and ASX’s own experience show that COVID-19 continues to have an impact on the industry. This includes the effect on collaboration and productivity, the importance of digitizing processes and the need to further reduce cutover risk to the new CHESS system.
The industry also requested substantially more post-trade processing capacity than what had been contemplated pre-COVID-19. This is in response to the extreme increases in trading volumes on the ASX platform during the most volatile period of the pandemic in March 2020. This period saw unprecedented ‘bursting’ of daily trade volumes, with additional trades in early March eclipsing previous records by approximately 3.5 million trades, compared to historical bursts of less than 0.5 million trades.
This increase has reset industry and regulator expectations about the possibility of further step increases in daily trading records. The need for the replacement system to scale to much higher processing levels and sooner, is now a Day 1 requirement. As a result, ASX has adjusted the Day 1 scope and schedule for the CHESS replacement system to target significantly more throughput capacity and scalability, more functionality, more industry testing, and more time for users and ASX to prepare.
Dominic Stevens, ASX CEO, said in a statement: “The functional scope, capacity, scalability and testing of the CHESS replacement system now being developed is greater. It captures the increased requirements of ASX and the industry, and lowers the risk in delivering them. It is also consistent with ASX addressing the expectations of the regulatory agencies that CHESS be replaced as soon as it can be achieved safely and that the new system meets the market’s needs.’