RBA's Bullock says ASX must keep review findings in mind during CHESS replacement
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What they said: RBA Governor Michele Bullock said there was still work to be done after the ASX appointed TATA Consultancy Services to design the replacement for CHESS:
‘Today’s announcement sets a new direction for the CHESS Replacement program. The Advisory Group, under Independent Chair Alan Cameron, has played an important role in bringing the interests of the market as a whole into today’s decision," she said in a statement.
"The Advisory Group’s input will remain critical throughout the implementation phase of the replacement solution. It will also be critical for ASX to address the findings from various external audits and reviews so that past issues with the program are not repeated."
ASX announces solution for CHESS replacement
The news: The Australian Securities Exchange has hired Indian technology provider TATA Consultancy Services to design the replacement for its CHESS share settlement system.
The numbers: The estimated cost for the first release of the project is between $105 million and $125 million, to be incurred over multiple years, with scheduled completion by 2026. The second phase is expected to be implemented in 2028 or 2029. The ASX said the expected issuance of a corporate bond of between $200 million to $300 million will support the cost of the project.
The context: Clearing House Electronic Subregister System, known as CHESS, is the computer system used by the ASX to manage the settlement of share transactions and to record shareholdings. In June, the ASX committed to using the 29-year-old infrastructure until 2032, after the market operator pulled the plug on a seven-year project to replace the system.
What they said: ASX Managing Director and CEO Helen Lofthouse said: “This next phase of the project will be a multi-year undertaking and ASX will maintain our investment in the current CHESS platform to ensure it continues to operate efficiently and reliably until the replacement is implemented.”
The source: ASX announcement
