ASX chairman Damian Roche said the exchange has concluded: “The path we were on will not meet ASX’s and the market’s high standards. There are significant technology, governance and delivery challenges that must be addressed.”
“On behalf of ASX, I apologise for the disruption experienced in relation to the CHESS replacement project over a number of years.”
ASX said it will establish an industry forum to provide input and receive regular status reporting on the project, as it decides what to do next.
ASX first selected Digital Asset Holdings to build the distributed ledger at the end of 2017, after it began exploring the technology in 2015. It was originally set to go live in April 2021, but then pushed back numerous times as it became clear that the system would not meet the needs of the market.
ASX said it would go back to the drawing board. “To be clear, the derecognition charge reflects the uncertainty of the future value of the current solution design. It does not prevent us from using parts of what we have already built if we determine there are adjustments we could make to our current design, which will enable it to meet ASX’s and the market’s high standards,” ASX said.
The independent report underscored “the magnitude and complexity of the CHESS replacement project”, ASX said. it identified “vendor management issues” including how ASX teams and those from Digital Asset “operate and interact which present challenges in project delivery”.
ASX said it Tim Whiteley had been appointed project director for the next phase of the CHESS replacement project. It will continue to invest in the existing CHESS system.
The review comes after a tough time for ASX, whose share price is trading down 23 per cent this year amid growing regulatory and political scrutiny and new leadership, after the exit of former CEO Dominic Stevens and much of his senior leadership team.
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