- Australian Securities Exchange (ASX) will reassess all aspects of the CHESS replacement project following completion of an independent review, conducted by Accenture and its own internal assessment.
- The independent report identifies significant challenges with the solution design and its ability to meet ASX’s requirements.
- Current activities on the project have been paused while ASX revisits the solution design.
- Current CHESS remains secure and stable, and is performing well. ASX will continue to invest in its capacity and resilience.
- The CHESS replacement capitalized software will be derecognized in light of the solution uncertainty, resulting in a charge of $245-255 million pre-tax ($172-179 million after tax) in 1H23. This will have no impact on dividends.
- A Project Director with extensive technology transformation experience has been appointed for the next phase of the CHESS replacement project.
ASX chair Damian Roche said in a statement: “We began this project with the latest information available at that time, determined to deliver the Australian market a post-trade solution that balanced innovation and state of the art technology with safety and reliability. However, after further review, including consideration of the findings of the independent review, we have concluded that the path we were on will not meet ASX’s and the market’s high standards. There are significant technology, governance and delivery challenges that must be addressed.
“On behalf of ASX, I apologize for the disruption experienced in relation to the CHESS replacement project over a number of years. ASX always endeavors to act in the best interests of the market, and I thank our customers and other stakeholders for their patience and support. Today’s decision has been made by the ASX Limited and Clearing and Settlement boards, and it has not been made lightly.”
ASX managing director and CEO Helen Lofthouse said in a statement: “Replacing CHESS is a large and complex undertaking. While ASX is keen to embrace technology that benefits the market, it’s clear we need to revisit the solution design as well as validate and test the feedback from the independent review to assess changes required to bring the project to market safely, efficiently and for the long-term.
“The independent report, coupled with our own assessment work, confirms a number of significant challenges associated with aspects of the CHESS replacement project. These findings provide valuable inputs to helping us determine a revised solution. We have some work to do before updating and consulting with stakeholders more deeply.
“In the meantime, our priority is continuing to maintain the stability of the existing CHESS system, which underpins the smooth operation of our financial markets.”