The Australian Stock Exchange will postpone blockchain-based CHESS compensation after huge trading volumes due to a pandemic that requires a significant increase in capacity. Official testing of the DLT-based system is scheduled for December with a launch scheduled for early 2022.
At its annual meeting this year, ASX CEO Dominic Stevens told shareholders that they want to double the capacity of the planned DLT system in response to the increase in trading volume seen earlier in March.
He also said the company is looking at the need to expand the schedule to meet “the need for significant extra capacity and functionality since the beginning of the day.”
The blockchain-based cleaning system was to replace CHESS in April 2022 and started in December this year.
ASX has been working to replace CHESS for the past four years, which has generated a lot of controversy.
Last year, CHESS Replacement Stakeholder Group, a financial market group with more than 6 million “mother and father investors”, raised concerns about ASX’s ability to consolidate its monopoly position. According to CRSG, DLT system integration can counteract competition in key market segments, “damaging or even threatening the long-term survival of brokers, stock registries and other stakeholders.”
Rick Holiday Smith, President of ASX, claims that the DLT platform will open up new avenues for competition and make clearance and settlement much easier for market participants.