ASX bid to replace share clearing system

The ASX has called for public comment on its plans to replace its share clearing system, CHESS.

The ASX has called for public comment on its plans to replace its share clearing system, CHESS.

The exchange released a discussion paper yesterday to get the views of all stakeholders on their requirements for the replacement of the current system, which has been in place for the past 20 years.

The call comes as the ASX has been moving along with its plans to examine the potential use of blockchain technology to replace CHESS. It reached an agreement with New York-based Digital Asset Holdings in January to work on a prototype for a post-trade share clearing platform using distributed ledger or blockchain technology.

Blockchain is the technology behind cyber currency bitcoin.

The ASX recently developed a successful prototype with DAH using blockchain technology.

The ASX has said it will make a final decision on the replacement for CHESS at the end of next year.

“CHESS is a critical financial market infrastructure,” the ASX says in its consultation paper.

“The ASX must ensure that the post-trade processes of Australia’s equity market can be performed by the replacement system to at least the same standards of reliability and resilience at CHESS.”