Australian stock exchange ASX is delaying the launch of a DLT system, even after being ordered by the country’s central bank and securities regulator to do so. S
The Australian Securities Exchange (ASX) announced today that it will be delaying the blockchain-based post-trade network cutover by one year. It cited the coronavirus pandemic and its impact on market volatility and user demand for the delay and said the system needs more testing and additional functionality.
The ASX has been working with Digital Asset, a DLT specialist since 2017 to replace its existing Chess post-trade settlement system with a new blockchain-based system. The system was initially set to go live earlier but the date was pushed to April 2021, only for the project to hit pause in March. The exchange sought user input on the schedule at the time.
What does ASX suggest?
The exchange suggests that most users of its Chess system said that they could meet the proposed date for going live in April 2022 but sought extra industry time, more time for new system preparations, and additional functionality which could reduce manual processes. The feedback also highlights the impact of the coronavirus pandemic on collaboration and productivity and the need for further reducing cutover risks in the new system.
The industry is also looking for significantly higher post-trade processing capacity than what was earlier contemplated. The extreme rise in trading volumes after the pandemic on the ASX platform during the most volatile period of March 2020 is a testimony to the increased volumes. During this period, ASX witnessed a ‘bursting’ in daily trade volumes which additional trades breaking all previous records. Historically, the ‘burst’ activities only brought 0.5 million trades but during March 2020, the number went up to 3.5 million.
The industry’s expectations about the possibility for further increases in daily trading records, according to Dominic Stevens, chief of ASX.