The blockchain replacement for the CHESS system that ASX Ltd (ASX: ASX) has been working on has been delayed, again.
If someone buys or sells financial products such as shares in a listed company, the title or legal ownership of those financial products must be exchanged for money.
The Clearing House Electronics Subregister System (CHESS) system facilitates the clearing and settlement of trades in shares and it provides an electronic subregister for shares in listed companies.
CHESS authorises participants such as brokers, custodians, institutional investors, settlement agents and so on to access CHESS and settle trades made by themselves or on behalf of clients.
The ASX has been working on a blockchain replacement. But there have been delays. Another delay has just been announced.
ASX CHESS replacement delayed
ASX announced an update today. It said that it now has 25 software providers working through functional testing and it has built and successfully system tested almost all mandatory features and over 90% of optional features of the new systems’ functionality with the software providers.
It said that the ledger (the blockchain) is “performing well”.
ASX also said that application code fixes identified are in line with expectations.
However, the company said that after receiving the next software release from its technology provider, it will be tested and deployed in July. Accreditation can commence once this software is available in July, rather than the end of April.
Accreditation commencement will vary, with some commencing in July and others from August.
The ASX said it will be engaging with stakeholders to assess the flow-on impacts to project milestones, industry testing, operational readiness and implementation, migration dress rehearsals and the go-live date.
The ASX finished its announcement with the following statement:
At this time, ASX advises that there is a strong likelihood of delay to the go-live date. We will engage with our software provider and stakeholders to assess the impact, and will update the market on this process.
Final thoughts
It’s not a good look for the ASX for this key project to be delayed so much. Hopefully it’s great when it is launched. It is better to be delayed but working from the launch, rather than rushed and not fully operational.
It will be interesting to see how things change for investors once the switch happens.
