ASX tests full stack of blockchain clearing system, advises on go-live delays

The Australian Securities Exchange (ASX)  opened the first fully integrated Industry Test Environment (ITE) in Q4 2021 for its blockchain replacement of the legacy CHESS clearing system, and provided an updated on the resulting activity, input and engagement across the industry.

At the end of Q1 2022, there are now have 25 software providers – including all vendors – working through functional testing and the team has built and successfully system tested almost all mandatory features and over 90% of optional features of the new systems’ functionality with software providers in ITE1.

In terms of performance of the ledger and the CHESS application:

  • The ledger (a.k.a. the blockchain) is performing well. Of note, the same technology (i.e. ledger and language) is now in production in the US and processing billions of dollars of US debt repo each day.
  • Application code fixes identified as part of ITE1 are in line with expectations, reflecting the high quality of the solution and extensive testing by software providers in the Customer Development Environment (CDE). This outcome is particularly important given the current testing environment represents the first time the full technical stack has been brought together.

Delay to next software release and accreditation schedule

ASX also advised that there is a “strong likelihood” of delay to the go-live date. Following receipt of the next software release (v1.3) from its technology provider, testing and deployment is planned in July.  This release will incorporate:

  • the next iteration of non-functional tuning of the application and code fixes identified by customers, and
  • a software candidate for providers to accredit against.

Accreditation can commence once this software is available in ITE1 in July, rather than the end of April. Accreditation commencement will vary dependent on the participant type the vendor is supporting, with some commencing in July and others from August.

Software providers will continue to work through functional testing (on v1.2) in ITE1. ASX will begin preparations for CHESS user testing once accreditation has commenced in ITE1 (in July), with CHESS user testing commencing following connectivity and onboarding and once the v1.3 software release has been tested and deployed in ITE2. As a result of the changes to the ITE2 approach, migration dress rehearsals (MDR) will not commence in October as previously advised.

Ongoing engagement and consultation

ASX noted that it recognizes the complexity and risk management necessary for this type of project and the need for comprehensive industry testing, integration and operational readiness. CHESS replacement is an ongoing process with the industry, and industry engagement will be even more important as it moves into a user testing environment and operational readiness activities, with an approach that ensures utmost confidence in a safe, secure and performant system at go-live.

Read the full Independent Expert Report

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