In December, ASX will “stress test” its CHESS core system

The Australian Securities Exchange (ASX) plans to conduct a “stress test” of its core trading system, CHESS, in December. The purpose of the test is to evaluate the system’s capability to handle trading volumes projected for 2032, as requested by regulators. Currently, CHESS can process up to 10 million trades per day based on a capacity increase performed in May 2021. The daily peak trading volume over a 24-month period was 4.8 million trades, with a three-month peak volume of 2.3 million as of February 2023. According to modeling, trading volumes are expected to reach 5 million transactions by February 2025 and 10 million by April 2030. This extended timeline for CHESS is due to the ASX abandoning its planned blockchain-based replacement and restarting the project. The ASX aims to keep the existing system operational until it can be replaced, which may involve contract extensions and exploring new upgrade paths. The ASX will also address the system’s capacity concerns and conduct a stress test in December to identify breakpoints and understand peak capacity. The report emphasizes the importance of upgrading cybersecurity around CHESS, although specific details are redacted. The access to skills and potential risks associated with the system are mentioned but also redacted. The report was prepared for ASIC and the Reserve Bank of Australia, and independent auditors have confirmed ASX’s efforts to address concerns and maintain documentation. The ASX is actively pursuing a permanent replacement for CHESS using more conventional technology and aims to announce the solution design by the end of this year. The ASX’s CEO acknowledges the need to rebuild trust and transparency around the project, while the newly appointed Chief Information Officer will be responsible for the technical aspects of the CHESS replacement program.