ASX reveals CHESS Release 2 implementation plans
26 November 2024 Australia
Image: eyeofpaul/stock.adobe.com
The Australian 麻豆传媒 Exchange (ASX) has published its implementation plan for the second phase of replacing the Clearing House Electronic Subregister System (CHESS).
Following industry consultation on scope and timing, ASX is targeting the implementation of Release 2 in 2029.
Helen Lofthouse, managing director and CEO at ASX, says: 鈥淲e continue to prioritise the safe delivery and reliability of the CHESS project.
鈥淭his is reflected in our proposal to implement the project over two releases and to implement Release 2 in 2029, which is expected to allow time for industry preparation and readiness activities following extensive stakeholder engagement.鈥�
ASX estimates that the project costs for Release 2 will be AU$270-320 million (US$175-207 million), incurred over multiple years, reflecting the complexity, duration, and number of stakeholders involved.
The company, operating Australia鈥檚 primary securities exchange, continues to work towards the 2026 deadline for Release 1, with project costs currently expected to be up to AU$105 million 鈥� the upper end of the previously communicated guidance range.
Lofthouse adds: 鈥淭he new CHESS system [that] we are implementing is [a] critical market infrastructure, and we need to make the appropriate investment to ensure it can provide for the market today and into the future.
鈥淎s we progress this important project, we are continuing our investment for the effective and reliable operation of [the] current CHESS.鈥�
The Australian cash equity market uses the CHESS for all trades executed on ASX, Cboe Australia, National Stock Exchange of Australia (NSX), and Sydney Stock Exchange (SSX).
The system, accommodating around 2,200 listed companies and nearly four million investors, currently works on a T+2 settlement cycle.
However, ASX says that the CHESS replacement, running on cloud-based services, will allow more flexibility in settlement cycles.
Besides T+1, the new system should provide capacity for further changes, according to ASX, which is implementing the new system in two releases to reduce overall delivery risk and help manage impacts on stakeholders.
Release 1, taking place in the first half of 2026, will replace the clearing component of CHESS and introduce Financial Information Exchange (FIX) messaging for trade registration.
Release 2 will replace the settlement and sub-register functionality, deliver improved corporate action functionality, and make further enhancements to clearing, according to ASX, which set the deadline to early 2029.
Following industry consultation on scope and timing, ASX is targeting the implementation of Release 2 in 2029.
Helen Lofthouse, managing director and CEO at ASX, says: 鈥淲e continue to prioritise the safe delivery and reliability of the CHESS project.
鈥淭his is reflected in our proposal to implement the project over two releases and to implement Release 2 in 2029, which is expected to allow time for industry preparation and readiness activities following extensive stakeholder engagement.鈥�
ASX estimates that the project costs for Release 2 will be AU$270-320 million (US$175-207 million), incurred over multiple years, reflecting the complexity, duration, and number of stakeholders involved.
The company, operating Australia鈥檚 primary securities exchange, continues to work towards the 2026 deadline for Release 1, with project costs currently expected to be up to AU$105 million 鈥� the upper end of the previously communicated guidance range.
Lofthouse adds: 鈥淭he new CHESS system [that] we are implementing is [a] critical market infrastructure, and we need to make the appropriate investment to ensure it can provide for the market today and into the future.
鈥淎s we progress this important project, we are continuing our investment for the effective and reliable operation of [the] current CHESS.鈥�
The Australian cash equity market uses the CHESS for all trades executed on ASX, Cboe Australia, National Stock Exchange of Australia (NSX), and Sydney Stock Exchange (SSX).
The system, accommodating around 2,200 listed companies and nearly four million investors, currently works on a T+2 settlement cycle.
However, ASX says that the CHESS replacement, running on cloud-based services, will allow more flexibility in settlement cycles.
Besides T+1, the new system should provide capacity for further changes, according to ASX, which is implementing the new system in two releases to reduce overall delivery risk and help manage impacts on stakeholders.
Release 1, taking place in the first half of 2026, will replace the clearing component of CHESS and introduce Financial Information Exchange (FIX) messaging for trade registration.
Release 2 will replace the settlement and sub-register functionality, deliver improved corporate action functionality, and make further enhancements to clearing, according to ASX, which set the deadline to early 2029.
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