Australian stock exchange delays blockchain settlement system after independent review flags problems
- ASX is reassessing plans to introduce a new blockchain-based system for settlement clearing and writing off US$165 million in costs
- A review by Accenture identified a slew of problems with the project, including unclear timelines, design complexity and communication snags
ASX will revisit all aspects of its work to swap its Clearing House Electronic Subregister System, known as Chess, for newer technology following an independent review by Accenture and its own internal assessment, the Sydney-based firm said in a statement on Thursday.
“While ASX is keen to embrace technology that benefits the market, it’s clear we need to revisit the solution design as well as validate and test the feedback from the independent review to assess changes required to bring the project to market safely, efficiently and for the long-term,” said Helen Lofthouse, ASX’s chief executive officer.
The high-profile plans had been seen as a major coup for the blockchain industry, but came under scrutiny following a string of delays, several millions of dollars of investments and leadership reshuffles at the exchange. Accenture’s report identified a slew of problems with the project, including unclear timelines, design complexity and communication snags.
ASX will write off A$245 million (US$165 million) to A$255 million in pre-tax costs related to the project in the first half of the year, the company said. Its shares have dropped 23 per cent in 2022, underperforming the benchmark S&P/ASX 200 Index’s 4.3 per cent decline.
Regulators are closely monitoring ASX’s ongoing management of clearing and settlement under its licenses, the Australian Securities and Investments Commission and the Reserve Bank of Australia said in a joint letter to the exchange.
