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

CHESS stands for clearing house electronic subregister system. It underpins all trades and settlements on the exchange.

The solution design and its ability to meet ASX’s requirements were identified as significant challenges by the independent report.

The current CHESS activities on the project have been paused while ASX reevaluates the solution design. Its current CHESS remains secure and stable, and is functioning well. ASX will continue to invest in capacity and resilience.

Accenture’s review was requested in August after the go-live date for the blockchain-based CHESS replacement was pushed back another 18 months to late 2024.

The ASX said it will charge $245-255 million pre-tax ($172-179 million after tax) in 1H23, as a result of the solution uncertainty and derecognition of CHESS replacement capitalised software, on the impact on dividends.

Chairman at the ASX Damian Roche, says 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.

“We have, however, come to the conclusion that the path we were proceeding on would not satisfy the ASX’s and the market’s lofty expectations, taking into account the conclusions drawn in the independent report.” says Roche

“There are significant technology, governance and delivery challenges that must be addressed.” he said.

The ASX says it is remaining committed to providing the best long-term clearing and settlement solution for the Australian financial market.