After a years-long attempt to replace the settlement system with a DLT-based one failed, ASIC and the Reserve Bank of Australia have warned the Australian Securities Exchange (ASX) that they are monitoring its CHESS replacement project.
According to chair Joe Longo, ASIC has ordered ASX to hire the consulting firm EY to perform an audit into the “support and maintenance” of its clearing settlement system, or CHESS.
In accordance with the RBA’s letter, the ASX must provide a public guarantee that it can continue to support CHESS in its current format, including by continuing to have access to programmers who are proficient in the required language (believed to be COBOL).
The document further stated that the “ASX is to publish its project and implementation timeline with dates for important milestones on its website.
“A fresh and reliable go-live date for the replacement of CHESS should be included in this strategy.”
Additionally, the RBA included a number of requirements for project governance.
To resolve conflicts between its business interests and its responsibility to maintain financial stability, the ASX will make the processes public and seek outside counsel.
In a letter in response, the ASX stated that it will abide by the demands of the two regulators.
