The Australian Securities Exchange (ASX) has cancelled a technology overhaul that was intended to replace its core trading service, the Clearing House Electronic Subregister System (CHESS), with a blockchain-based system.
The ASX has apologized for abandoning a multi-year plan to upgrade its clearing and settlement system.
The decision was made “in light of the solution uncertainty,” it said, and will cause a charge of AUD $245-255 million pre-tax ($172-179 million after tax), which the company has written off.
Accenture’s independent audit reported issues and identified “significant challenges” with the blockchain system’s design, such as uncertainty over how ASX requirements interact with the application and underlying ledger.
Damian Roche, Chair of ASX, said, “We have concluded that the path we were on will not meet ASX’s and the market’s high standards. There are significant technology, governance, and delivery challenges that must be addressed.”
ASX had been developing a distributed ledger technology (DLT) solution to replace its 25-year-old CHESS, which was used to record shareholdings and manage transaction settlements. The system was supposed to go live in 2020, but it has been plagued by many delays over the years.