ASX reports AU$219m H1 profit as it readies futures trading platform for March

The Australian Securities Exchange (ASX) has announced its results for the first half of the 2017 financial year, reporting after tax profit of AU$219.4 million, up 3 percent over the corresponding period a year prior.

The ASX spent an additional AU$5 million year on year, noting its AU$90.1 million operating expenses included a AU$34.9 million outlay on initiatives such as technology to support growth-related projects, including its new post-trade platform and new futures trading platform, which the ASX said is on track to go live next month.

Revenue for the half was also up AU$10.4 million to AU$386.6 million.

The ASX announced in June that it was building a new post-trade solution using blockchain technology, asking for market feedback. This followed the ASX enlisting US-based firm Digital Asset at the start of last year to help it develop blockchain solutions for the equity market.

The organisation has been planning to replace or upgrade its trading and post-trade platforms for almost two years, announcing in September that it had a complete prototype and was now moving to building an "industrial-strength solution" to use as its equity settlement and clearing platform.

The blockchain solution will replace the legacy Clearing House Electronic Subregister System (CHESS) platform as a more efficient mechanism at the exchange, which the ASX recently touted as having the ability to significantly improve the efficiency of clearing and settlement -- not only for the organisation, but for its customers as well.

The ASX told shareholders on Friday that the new CHESS trading platform will provide 24-hour OTC clearing and OTC client clearing enhancements that it expects will provide "contemporary" technology and additional functionality.

Stakeholder consultation commenced in Q4 2016 to gather and prioritise business requirements. The ASX then issued a consultation paper in December 2016, with ASX confirming on Friday that the consultation summary and the exchange's response will be released in Q1 2017.

Although the ASX believes implementing blockchain within Australia's financial markets will strengthen its global competitiveness, it is expected the ASX will know whether a blockchain-based solution is the best solution for its requirements following the consultation period.

In September, hardware failure caused a series of technical issues and errors that disrupted and ultimately halted trading on the ASX's equities trading system ASX Trade.

During the half, the ASX announced the departure of CIO Tim Thurman, who will leave the exchange in April as he heads back to Canada for family reasons, where he has also accepted another position.

The ASX also lost its managing director and chief executive officer Elmer Funke Kupper in March, with Kupper's positions terminated with immediate effect. At the time, the board appointed Rick Holliday-Smith to the role of CEO, before officially appointing Dominic Stevens as the exchange's chief.

For the 2016 financial year, the ASX reported AU$426.2 million in after tax profit on revenue of AU$746.3 million.