ASX Confirms Active Development of Blockchain Clearing and Settlement System

The Australian Stock Exchange (ASX) has released a full financial report for 2019, which contains information on the developed settlement system based on a distributed registry.

At the end of 2017, the Australian Stock Exchange confirmed that the blockchain will replace its current clearing and settlement system Clearing House Electronic Subregister System (CHESS). Then ASX became the first major stock exchange to take such a step. The decision was made after the “successful creation of enterprise software” based on the blockchain, which was subjected to “extensive testing” for two years.

The ASX annual report released this week indicates that work to complete the development of the system is “in full swing.” The new system on the blockchain “will provide increased security, stability and productivity” for the services of post-trading stock services. It will also offer new features beyond those currently included in CHESS, with the new ISO 20022 messaging protocol (an international standard for financial services) that “meets local and global standards.”

The document states that institutions will be given the opportunity to access the future system by hosting their own DLT node. According to ASX, this will open access to synchronized and standardized data to all authorized participants in the network, as well as open the possibilities of advanced audit and data analysis. It will also allow the market to create “new, innovative” applications.

ASX also noted that it is investigating the use of DLT-based multi-party applications in dealing with stocks. In terms of costs, ASX’s capital investments in infrastructure, including the blockchain-based system, cost $ 75.1 million in fiscal year 2019. This also includes work on a new secondary data center, ASX Net communications infrastructure, ASX DataSphere data analysis platform, and efforts to accelerate corporate transactions.

In general, the exchange operator said that it was a “confident” year with revenue of $ 863.8 million, which is 6.5% more than the same indicator for the previous fiscal year. Basic income after taxes and expenses amounted to $ 492 million, which is 7.7% more than in 2018.

ASX introduced in May
a pilot series of customer service standards (CDE) as part of the transfer of the settlement system to the blockchain. Then the exchange noted that the addition of additional functions will be completed by August, and the final version will be ready by mid-2020.