ASIC, RBA outline expectations to ASX on CHESS replacement

The news: The Australian Securities and Investments Commission and the Reserve Bank of Australia have warned ASX it must consult with a newly established advisory group on the replacement of the CHESS settlement system. The advisory group includes industry stakeholders and will advise ASX on strategic clearing and settlement matters.

The context: A project to replace ASX's 29-year-old clearing and settlement system with a blockchain-based solution began in 2015, but it faced multiple delays and was eventually scrapped in 2022. In June, the ASX revealed it intended to keep CHESS operating until 2032, 36 years after the sub-register went live.

What they said: "We are prepared to use all available regulatory measures to ensure ASX Clear and ASX Settlement comply with our expectations and obligations under the Corporations Act," ASIC chair Joe Longo said.

"It is important that the market’s trust and confidence in the CHESS replacement program is restored," RBA deputy governor Michelle Bullock said.