ASX Partners with TCS for Groundbreaking Trading System Revamp
The Australian Securities Exchange (ASX) has announced its collaboration with Tata Consultancy Services (TCS) in a groundbreaking project to design and replace its existing trading, clearing, and settlement system. This collaboration comes after the ASX faced backlash for canceling a blockchain-based overhaul of its system last year.
ASX plans to implement the new product-based platform in two releases. The first release will focus on delivering the clearing service, while the second release will tackle settlement and sub-register services. The estimated cost for the initial release of the project is between A$105 million and A$125 million, spread over several years.
According to ASX, the chosen product will provide a reliable, supportable, and scalable platform that meets the current and future needs of the Australian market. The initial attempt by ASX to modernize its aging Chess software using blockchain technology faced criticism from the Australian Securities and Investments Commission (ASIC) and Reserve Bank of Australia.
ASIC had initiated an investigation into ASX’s public disclosures regarding the previous project before its cancellation. Clearing and settlement services are typically managed by separate entities in major financial markets, leading Australia to pass laws aimed at encouraging competition and breaking ASX’s monopoly.
ASX must now focus on engaging with the market to determine the detailed design of the Chess replacement program with a realistic timeline for implementation, believes ASIC Chairman Joe Longo. ASIC also emphasizes the need for ASX to ensure the ongoing maintenance of the existing Chess software to meet resilience, reliability, integrity, and security requirements.
The first release of the project is expected to be implemented by 2026, followed by the second release in 2028 or 2029. Further stakeholder consultation for the next phase of the Chess replacement project is scheduled to begin in the first quarter of 2024. ASX has also entered into an agreement with Accenture to provide additional capability and capacity for the project delivery.
ASX CEO Helen Lofthouse stated that this next phase of the project will be a multi-year endeavor. In the meantime, ASX will continue to invest in maintaining the current Chess platform to ensure operational efficiency and reliability until the replacement system is implemented.
Neither TCS nor Accenture have provided comments on the collaboration yet.
This collaboration between ASX and TCS marks a significant step forward in the transformation of Australia’s trading, clearing, and settlement system. By leveraging TCS’ expertise, ASX aims to create a modern, technologically advanced platform that caters to the needs of the Australian market. The focus now lies on seamless execution and stakeholder engagement to successfully implement the new system by the projected timelines.
