The Sydney-based stock exchange paused the launch plans for its new DLT-based system that would provide same-day settlements for trades on Wednesday. Originally scheduled for April 2021, consultation on a new implementation timetable, including a new launch date, will start in June, the exchange confirmed in a statement Wednesday.
The Australian Securities Exchange (ASX) has postponed the launch of its long-awaited distributed ledger technology (DLT) trading system due to «uncertainty» prompted by the coronavirus outbreak.
With the new coronavirus now rapidly spreading in Australia, ASX Deputy CEO Peter Hiom said the exchange’s priority was now to monitor daily events and «focus on day-to-day operations.» Waiting until June before drawing up a new schedule would give the ASX «more time to consider the replan and better assess the implications of COVID-19,» he added.
This is the latest installment in a 4.5-year saga for ASX, which first toyed with the idea of replacing its aged Clearing House Electronic Subregister System (CHESS) with a DLT alternative in October 2015.
ASX said Wednesday it would utilize the extra time to work on the system’s operational readiness, review possible changes to its rules of operation and allow back-end engineers to become more familiar with the system ahead of launch.
Plans to trial the new DLT trading infrastructure in an Industry Test Environment (ITE) are still on target for July.
“ASX remains fully committed to CHESS replacement,» Hiom added. «The investments we are making in the new system and in distributed ledger technology are for the long-term benefit of the financial services industry and the Australian economy.»
Last month, the National Stock Exchange of Australia – ASX’s rival – said it was building a digital securities platform to launch in the early part of 2021. It’s uncertain whether its plans have also been affected by the coronavirus. CoinDesk has approached the exchange for comment.
ASX DLT System ‘On Track,’ Says Annual Report
The Australian Securities Exchange (ASX) has released its full 2019 financial report, offering some insight into its upcoming distributed ledger-based settlement system.
A project that was announced back in late 2017 after trials with blockchain tech had proved promising, the DLT platform is aimed to replace ASX’s ageing CHESS settlement system using technology built by New York-based Digital Asset, then under the leadership of Blythe Masters.
The exchange said at the time it would build a similar payment messaging system to CHESS, but anonymized and accounted for on a distributed ledger, allowing a wide range of financial products that rely on automated settlement to be created.
ASX’s yearly results, published Thursday, indicate that work is “on track” to complete the system (likely in 2021), which will “will deliver upgraded security, resilience and performance” for equity post trade services. It will also offer new functionality over and above what is currently enabled by CHESS, with a new messaging ISO 20022 protocol (an international standard for financial services) that “aligns with local and global standards.”
The document sets out that there will be an option for institutions to access the upcoming system by hosting their own DLT node. That, the ASX says, will offer synchronized and standardized data across the permissioned participants on the network, advanced auditing and data analytics. It will also enable the market to build “new, innovative” applications.
The ASX also indicates that it’s investigating DLT application use cases with “multiple parties” related to equities and more.
As far as costs go, the ASX’s capital investment in infrastructure, including the DLT system have cost $75.1 million in financial year 2019. That also includes work on a new secondary data center, ASX Net communications infrastructure, a data analytics platform called ASX DataSphere and an effort to speed up corporate transactions.
Overall the firm said it’s had a “strong” 2019, with revenue at $863.8 million – up 6.5 percent on a like-for-like basis. Underlying profit after tax and expenses was $492 million, up 7.7 percent from 2018.
Back in May, the ASX said it was already allowing clients to test its DLT system. Via a Customer Development Environment (CDE), customers are able connect to the system via a blockchain node and experiment with the tech. Once connected, users can design, build and test system changes, as well as access some of the new business functionality.
