Australian bourse operator partners with TCS for long-due trading software overhaul

:Australian bourse operator ASX Ltd said on Monday it would proceed with a product-based solution delivered by TATA Consultancy Services to design and replace its trading, clearing and settlement system.

ASX said it would implement the new platform in two main releases, with the clearing service to be delivered in a first release, and the settlement and sub-register services in a second release.

The estimated cost for the first release of the Clearing House Electronic Subregister System (CHESS) project is between A$105 million ($68.33 million) and A$125 million, to be incurred over multiple years, ASX said.

ASX’s initial attempt to overhaul CHESS earned rebuke from the Australian Securities and Investments Commission (ASIC) and Reserve Bank of Australia, with the regulators demanding more thorough reporting on plans to update the 30-year-old software.

ASIC had also opened an investigation into ASX’s public disclosures about the previous project before it was shelved.

ASX had been looking to replace its aging all-in-one legacy CHESS software using blockchain-based technology, but abandoned the overhaul in November citing dysfunctional management, concerns about the product’s complexity and scalability, and difficulty finding experts to support it.

Australia has also passed laws to encourage competition in an attempt to break up ASX’s monopoly over clearing and settlement.

“It will be critical for ASX to now focus on engaging with the market on the detailed design of the CHESS Replacement program with a realistic and achievable timeline for implementation,” ASIC Chair Joe Longo said in a separate statement.

The estimated time frame for implementation of the first release is 2026, and for the second release is 2028 or 2029, ASX said on Monday, adding that further stakeholder consultation for the next phase of the CHESS replacement project is set to start in the first quarter of 2024.

ASX also entered a deal with Accenture to provide additional capability and capacity in the project delivery.

($1 = 1.5366 Australian dollars)