The Australian Securities and Investments Commission (ASIC) and the Reserve Bank of Australia (RBA) issued a joint announcement to acknowledge an announcement made by the Australian Stock Exchange (ASX) on its product-based solution design to replace the Clearing House Electronic Subregister System (CHESS). This announcement is pivotal in the financial sector as it signifies a significant change in stock exchange systems.
The decision for the new design was not done in isolation, as it involved consultations with industry experts. The ASX Cash Equities Clearing and Settlement Advisory Group, comprised of industry leaders, had recently advised ASX Clear and ASX Settlement on strategic clearing and settlement issues. The advisory group, headed by independent chair Alan Cameron AO, is on board with the solution design announced by ASX, finding it an appropriate CHESS replacement option. However, it recommended that ASX provide transparency on any adverse impacts.
https://www.rba.gov.au/media-releases/2023/mr-23-32.html
Notable figures within ASIC have commented about this important shift. "This is an important decision by ASX, but there is still a long way to go to deliver a CHESS replacement. It will be critical for ASX to now focus on engaging with the market on the detailed design of the CHESS Replacement program with a realistic and achievable timeline for implementation," ASIC Chair Joe Longo said.
In addition to ASIC's commentaries, more details have been released regarding this transition. According to a press release by the Australian Securities and Investments Commission, ASX had recently reassessed the solution design to replace CHESS and will move forward with a modular technology platform by TATA Consultancy Services. ASX is preparing for the next phase of detailed design and implementation, which will be executed in two main releases. During this phase, it will also seek additional input from stakeholders. Consultations are expected to begin in 2024.