The Australian Securities Exchange (ASX) has been building the world's first, actual industrial-scale blockchain use case -- a new post-trade solution to replace its legacy Clearing House Electronic Subregister System (CHESS) platform, which has been running for around 25 years.
When delivering the organisation's financial results in February, ASX CEO Dominic Stevens said the system would be ready for industry-wide testing in July and that full-functionality could arrive by April 2021.
However, in March, the ASX announced it had revised the implementation timetable for replacing CHESS and would consult with CHESS users as a result of the COVID-19 pandemic.
The ASX in June then said it would revise its target go-live date to April 2022.
On Wednesday, it revised the target to April 2023.
"While most CHESS users indicated they could meet the proposed go-live date of April 2022, many asked for extra industry testing, more time to prepare for the new system and additional functionality that reduces manual processes (such as electronic corporate action elections) to be delivered as soon as possible," the ASX said in a statement.
"The feedback from stakeholders and ASX's own experience show that COVID-19 continues to have an impact on the industry. This includes the effect on collaboration and productivity, the importance of digitising processes, and the need to further reduce cutover risk to the new CHESS system."
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The ASX said the industry has also requested substantially more post-trade processing capacity than what had been contemplated pre-COVID-19.
According to the exchange, this is in response to the extreme increases in trading volumes on the ASX platform during the pandemic. The ASX said early March saw "unprecedented" bursting of daily trade volumes, which eclipsed previous records by approximately 3.5 million trades when compared to historical bursts of less than 0.5 million trades.
"This increase has reset industry and regulator expectations about the possibility of further step increases in daily trading records. The need for the replacement system to scale to much higher processing levels and sooner, is now a day one requirement," it said.
Stevens said as a result of the delay, CHESS would be a "significantly enhanced" replacement solution.
"By its nature, a consultative process that considers all industry feedback will not satisfy everyone. We acknowledge those who have been working hard and would have preferred a faster delivery time," Stevens said.
"However, replacing CHESS is an important and innovative project, with significant long-term benefits for Australia's financial market users. It is ASX's responsibility to deliver it in a safe and timely manner, and to consider the feedback from all our stakeholders. We thank all our industry participants, who are working in collaboration with us to ensure the successful delivery of the new system, as well as the ongoing engagement of our regulatory agencies."
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