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ASX Cancels Years-Long Blockchain Settlement and Clearing System Project

Cointime Staff· 2 min read

ASX WILL REASSESS ALL ASPECTS OF THE CHESS REPLACEMENT PROJECT AND DERECOGNISE CAPITALISED SOFTWARE OF $245-255 MILLION PRE-TAX IN 1H23

Key points

ASX will reassess all aspects of the CHESS replacement project following completion of an independent review, conducted by Accenture, and its own internal assessment.

The independent report identifies significant challenges with the solution design and its ability to meet ASX's requirements.

Current activities on the project have been paused while ASX revisits the solution design.

Current CHESS remains secure and stable, and is performing well. ASX will continue to invest in its capacity and resilience.

The CHESS replacement capitalised software will be derecognised in light of the solution uncertainty, resulting in a charge of $245-255 million pre-tax($172-179 million after tax) in 1H23. This will have no impact on dividends.

A Project Director with extensive technology transformation experience has been appointed for the next phase of the CHESS replacement project.

ASX remains committed to providing the best long-term clearing and settlement solution for the Australian financial market.

ASX Chairman Damian Roche said: "We began this project with the latest information available at that time, determined to deliver the Australian market a post-trade solution that balanced innovation and state-of-the-art technology with safety and reliability. However, after further review, including consideration of the findings in the independent report, 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.

"We are committed to providing the Australian market with the very best and most viable long-term solution. I am proud of our ambition but believe we should now pause to reassess our solution for the future.

"On behalf of ASX, I apologise for the disruption experienced in relation to the CHESS replacement project over a number of years. ASX always endeavours to act in the best interests of the market, and I thank our customers and other stakeholders for their patience and support. Today's decision has been made by the ASX Limited and Clearing and Settlement Boards, and it has not been made lightly.

"ASX provides critical market infrastructure. What we do matters. We must do it right and we will. Importantly, our current CHESS system is performing well and investment in it will continue, giving us flexibility to reassess the various pathways for its ultimate replacement," Mr Roche concluded.

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