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ASX provides clarity on CHESS replacement decision

ASX has responded to recent claims regarding the selection of a replacement for the Clearing House Electronic Subregister System (CHESS), stating that “no decision has been taken” yet. The clarification came in a letter to the chair of the Parliamentary Joint Committee on Corporations and Financial Services, following allegations made by Labor Senator Deborah O’Neill, who cited anonymous sources suggesting that ASX had chosen Nasdaq as its partner.

In the letter, ASX emphasised its commitment to thoroughly evaluating various options for the CHESS replacement and considering a range of technologies and partners. ASX highlighted four potential solutions: fixing the existing CHESS system, building a custom solution, adopting a product-based solution, or iteratively improving the legacy CHESS system.

According to ASX, an important step in exploring a product solution was issuing a request for information (RFI) in April. ASX then undertook a process to narrow down the list of product vendors, who have now responded to a request for proposal (RFP). ASX is currently in the process of assessing the proposals from the shortlisted vendors.

ASX also mentioned that a request for proposal was sent in mid-June to a panel of organisations to provide solution integration capability for the project. Responses to this RFP are expected in mid-July. The selected solution integrator will be incorporated into the overall decision-making process later this year, as stated in the letter.

“These processes with potential partners are all commercial-in-confidence for ASX and the other parties involved,” the letter noted. ASX aims to announce its decision regarding the CHESS replacement before December, along with a “high-level project plan and timing for further public consultation with stakeholders on solution scope and implementation.”

ASX remains committed to ensuring transparency and engaging with stakeholders throughout the decision-making process. The organisation aims to modernise its clearing and settlement system to meet the evolving needs of the market and participants.

In response to the ongoing speculation, an ASX spokesperson stated, “We want to assure market participants and stakeholders that no decision has been made yet regarding the CHESS replacement. We are thoroughly evaluating all potential solutions and engaging with various partners. The selection process is being conducted diligently, and we will provide a comprehensive update before the end of the year.”

The decision on the replacement for CHESS is eagerly anticipated by industry participants and market observers, given its significant impact on the Australian securities market. ASX’s commitment to a transparent and diligent approach underscores its dedication to achieving the best outcome for all stakeholders involved.