Home Market ASX to delay switch to blockchain by at least six months
ASX to delay switch to blockchain by at least six months Pixabay Featured

The Australian Stock Exchange has put off switching on its new blockchain by about six months, after a public consultation process showed that market participants had some apprehensions about moving to the new system in the final quarter of 2020.

In a paper released on Tuesday, the ASX said though there was support for switching, there appeared to be a need for "more detailed information in specific areas" to move ahead with necessary planning and budgeting.

In April, the ASX had said that the earliest start date for the new system would be September 2020 and it might extend as far as March 2021. On Tuesday, it said the target start date was March or April 2021.

"...respondents questioned whether the proposed implementation window of Q4 2020 to Q1 2021 was achievable given the significance of the technology change and the range of new scope being introduced," it said.

The ASX said that the modified plan would now:

  • defer implementation of seven new scope items from Day 1 to post-Day 1 and bring forward one new requirement in response to strong representations from a number of respondents;
  • push back the earliest commencement date for the new system from Q4 2020 to target March-April 2021;
  • provide an additional six months for user development and testing;
  • defer commencement of industry-wide testing by six months; and
  • extend mandatory accreditation by six months.

asx plan

The company has been using a system known as CHESS for more than 25 years for the conversion of physical shares into a digital format. This system handles "clearing, settlement, asset registration, and some other post-trade services which are critical to the orderly functioning of the market".

The decision to switch to distributed ledger technology, otherwise known as blockchain, was taken because it would "will provide a broader range of benefits to a wider cross section of the market".

In Tuesday's paper, the ASX said there was still broad support for a single cutover weekend. Requests for early access to documentation had been received and the company said it would release technical documents at least three months before each incremental software release.

Questions had also been received about managing data — how the blockchain-based system would affect data ownership — and the different connectivity options.

Tuesday's paper has a detailed timetable for the proposed implementation and can be downloaded here.

Chart: courtesy ASX

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Sam Varghese has been writing for iTWire since 2006, a year after the sitecame into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

 

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