The Australian Securities Exchange (ASX) has agreed to hold a roundtable, as requested by the Australian Securities and Investments Commission (ASIC), to re-engage the industry regarding its troubled CHESS replacement project.
ASIC has proposed an independent chairperson for the roundtable, which will focus on significant strategic clearing and settlement issues related to cash equities trading in Australian markets, specifically addressing the CHESS replacement.
Scheduled for early August, the roundtable will be chaired by ASIC Chair Joe Longo, and attendees will include ASIC Commissioner Danielle Press, the Deputy Governor of the Reserve Bank of Australia, Michele Bullock, and a small group of recognized industry leaders.
The roundtable comes as the troubled CHESS replacement program undergoes a redesign following the discontinuation of an earlier blockchain-based replacement due to various challenges in technology, governance, and delivery.
ASIC announced an investigation into the CHESS program in March
Although the ASX remains interested in blockchain technology, ASIC announced an investigation into the CHESS program in March to determine if there were any violations of the ASIC Act 2001 and the Corporations Act 2001.
The change in direction for the project at a late stage resulted in significant costs for the industry and a loss of trust.
ASIC Chair Joe Longo emphasized the urgent need for effective engagement between ASX and the industry to get the project back on track, stating that establishing an appropriate stakeholder advisory group is crucial for rebuilding confidence in ASX’s decision-making and culture.
ASX has invited 12 industry leaders from various stakeholder sectors and backgrounds to participate in the roundtable, emphasizing the importance of successful stakeholder engagement for the CHESS replacement.
ASX intends to shift the project into a detailed design and implementation planning phase, which will involve increased levels of stakeholder engagement as progress is made in the new solution design.
ASX Managing Director and CEO Helen Lofthouse reiterated the commitment to transparency and enhanced stakeholder engagement, with plans to release an expert report on intra-group conflict management arrangements later in the month.
While the CHESS replacement is being considered, ASX will continue to ensure that its current system can meet the demands of trading volume. A stress test of the existing core trading system is planned for December to assess its capability in meeting projected 2032 trading volumes.