Major Australian stock market reports more delays for key blockchain project
Australia’s leading stock exchange said a key technology upgrade originally planned a year ago will now be delayed until the second half of 2023.
A month after announcing to investors that its planned replacement of the Clearinghouse Electronic Sub-Register System (CHESS) was on track for an April 2023 launch, ASX Ltd reported on Monday that its new data warehouse faced several additional months of delay.
The ASX uses CHESS to track the holdings and personal details of investors.
The beleaguered $250 million replacement project — designed to usurp a system that’s been in use for more than 25 years — was originally expected to be ready by April 2021.
Covid-19 setbacks in 2020 pushed that date back to April 2022 and again to April 2023 after CHESS users requested more industry testing.
It will no longer be necessary to wait until July or August 2023 for the accreditation calendars to begin.
“ASX advises that there is a high likelihood of a delay in the go-live date,” Group Director Tim Hogben said in an update Monday.
ASX Ltd chief executive Dominic Stevens said in early February that the company was on track to deliver the project before the latest setback.
This time, the market operator has implicated Digital Asset, the company developing what will be the first industrial-scale use of blockchain technology.
“The replacement of CHESS is an ongoing process with industry, and industry engagement will be even more important as we move into the CHESS user testing environment and operational readiness activities, and as we agree on an approach that ensures the utmost confidence in a safe, secure and high-performing system during commissioning,” said Hogben.
“We recognize the impact these changes will have on our customers’ programming activities and apologize for any inconvenience.”
This latest delay comes after a series of technology issues and outages at ASX Ltd over the past few years.
Two weeks ago, the $15.5 billion company apologized to investors after unspecified “technical difficulties” halted trading in various futures and options products ahead of key employment data.
Regulators warned the ASX in November 2020 when a major software upgrade caused a crash and stopped people from buying and selling stocks for almost a full day.
The ASX enjoys a bit of a monopoly in Australia, but there are rivals including the smaller National Stock Exchange (NSX) and Chi-X Australia.
ASX Ltd, which is itself listed on the exchange it operates, traded down 0.5% to $80.07 in afternoon trading on Monday, as the tech sector at broad sense has dropped.
The company has lost about 15% of its value since hitting a stock price high of $95.83 at the end of 2021.