ASX shares slide on CHESS 2 cost estimate
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More news: Shares in the Australian Securities Exchange (ASX) slumped in early trading after the bourse operator flagged costs of between $270 million and $320 million to implement its Clearing House Electronic Subregister System (CHESS) system by 2029.
ASX shares were down 3.1% to $67.02 by 10:40am AEDT, having added around 17% over the last 12 months.
ASX flags up to $320 million cost for CHESS 2, targets 2029 release
The news: The Australian Securities Exchange (ASX) has announced it will cost between $270 million to $320 million to implement its Clearing House Electronic Subregister System (CHESS) system by 2029.
The numbers: The bourse operator said it is still continuing to “work towards” a 2026 delivery for phase one of the CHESS project, but this is now expected to cost up to $125 million, at the upper end of its previously stated range. However, existing capital expenditure guidance remains unchanged, it said.
Phase two of the project will cost between $270 million and $320 million and will be incurred over multiple years, ASX said, reflecting the complexity, duration and number of stakeholders involved in the delivery of the settlement and subregister services.
The context: CHESS is the computer system used by the ASX to manage the settlement of share transactions and to record shareholdings. In 2022, the operator scrapped a seven-year project to replace the system, after facing multiple delays, prompting the corporate regulator to take legal action earlier this year over alleged misleading statements.
Last year, ASX hired Indian technology provider Tata Consultancy Services to design the replacement for the 29-year-old infrastructure, with the first phase to be completed by 2026 and the second phase scheduled for 2028 or 2029.
The source: ASX announcement
