ASX to Decide on Replacing CHESS Platform with Distributed-Ledger Solution by End of 2017

The Australian exchange recently completed the prototype for the distributed-ledger technology (DLT) platform

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The Australian Securities Exchange (ASX) has completed its distributed-ledger-based prototype for a new equities clearing and settlement platform, but will only make its final decision whether or not to replace its existing Clearing House Electronic Subregister System (CHESS) platform at the end of 2017.

"At the back-end of calendar year 2017 we will be in a position to announce whether this will indeed replace CHESS," ASX said in an announcement in conjunction with its annual general meeting on Sept. 28.

It said it strongly believed in the potential of DLT, but added that deploying it as a replacement would take time, close coordination and requires industry support.

ASX is currently working on building the prototype up to an "industrial strength solution" that could be used to replace its legacy CHESS platform.

This move is a part of ASX's initiative, which began in February 2015, to replace and upgrade its main trading and post-trade platforms.

Earlier this year, New York-based Digital Asset Holdings was tasked to develop, test and demonstrate a working prototype of a post-trade platform for the exchange's cash equity market using DLT.

ASX bought an initial 5-percent stake in the company and later upped it to 8.5 percent in June this year.

From the initial phase of work, ASX concluded that DLT met its initial tests for scalability, security and performance requirements as a replacement system.

The exchange has so far spent $38 million (AUD$50 million) on technology in the past fiscal year, which ended June 2016, but did not specify how much of that was apportioned to the DLT project.

 

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