The Australian Securities Exchange (ASX) in its latest statement has outlined that it will be implementing a blockchain-based post-trade system, a move that will seek replacement of the Clearing House Electronic Subregister System (CHESS) system, which in in place at the moment. A person well conversant with the matter has asserted that the implementation might start for as early as Q4 2020.
Unleashing the public consultation paper
It was sometime back that ASX unleashed a public consultation paper. It was characterized by the two-and-a-half year implementation plan as well as the planned new orders. It was a paper confirming that The ASX will employ the most recent distributed ledger technology towards the management of the Australian financial market. Cost reductions was a top priority and it is thus anticipated that there will be unveiling of about 50 new features to help achieve this goal.
The settlement of participants
There will of course be the need to settle the various participants on either side of the bilateral transaction and the new system is expected to cater for that. Digital Asset, a New York-based fintech company, is currently coming up with a wide range of DLT products and it is worth noting that it is the main technical partner for the initiative.
In the past 25 years, CHESS has stuck out as the central system for asset registration, settlement, clearing, not forgetting the various post-trade services that are deemed crucial to the orderly functioning and operation of the diverse market.
ASX brought it out clearly that CHESS had over the years proven to be rather stable and the other point was that it was delivering services quite effectively. There is no doubt that CHESS will continue delivering the same service level for periods to come. ASX remains committed to the replacement of CHESS with the distributed ledger technology (DLT). It is confident that it will achieve much in line with delivering a wide range of benefits to a wider cross-section of the market.
Elmer Funke Kupper, who was at the point the managing director of ASX termed the blockchain-powered platform the prefect replacement for CHESS.