ASX faces fresh technical review of core system – Financial Services – Software

The Reserve Bank of Australia (RBA) and the Australian Securities and Investments Commission (ASIC) have called out the “slow” progress of improvements to ASX core systems, and demanded a technical review.

The demands are part of the fallout from a December 20 incident that resulted in the delayed trade settlements.

In a joint letter [pdf], the central bank and financial regulator said they “are increasingly concerned and deeply disappointed over the management of operational risk at ASX, following the CHESS batch settlement failure.”

While noting ASX has made some improvements to its CHESS core settlements system, the two organisations wrote that “the pace of change at ASX is too slow”.

“Broader improvements are needed to more comprehensively address these foundational issues,” they said.

The ASX is trying to replace the CHESS system. 

An earlier blockchain-based replacement failed, and the exchange is now looking at a core running TCS technology instead.

In the interim, the life of the current CHESS system has been extended, with some upgrades.

ASIC has ordered the ASX to undertake a fresh technical review of CHESS and to publish the findings.