https://insideadviser.com.au/asx-drops-plan-to-replace-chess-with-blockchain-writes-off-250m/ The Inside AdviserThe Inside AdviserThe Inside Adviser Menu SUBSCRIBE Search * News + Launches + People + M&A + Regulation * Markets + Equities + Growth assets + Fixed Income + Defensive assets + Alternatives + Asset Allocation + ESG * Super + SMSF + Retirement + Strategy + Industry * In Practice + Advice + Technology + Marketing + Transactions * Opinion + Asset management + Retirement + Economics + Value proposition + Deeper Thought * Legislation + Compliance + Regulation + Retirement * Education * IN Discussion SUBSCRIBE Search Search for: [ ] [Search] Close search Close Menu * NewsShow sub menu + Launches + People + M&A + Regulation * MarketsShow sub menu + Equities + Growth assets + Fixed Income + Defensive assets + Alternatives + Asset Allocation + ESG * SuperShow sub menu + SMSF + Retirement + Strategy + Industry * In PracticeShow sub menu + Advice + Technology + Marketing + Transactions * OpinionShow sub menu + Asset management + Retirement + Economics + Value proposition + Deeper Thought * LegislationShow sub menu + Compliance + Regulation + Retirement * Education * IN Discussion -0.27% ASX | -0.83% S&P 500 | +$0.67 AUD Transactions --------------------------------------------------------------------- Tahn Sharpe [svg][1623907035209-150x15] Tahn Sharpe is managing editor across The Inside Network's publications. A journalist, editor and former financial adviser who writes on the advice industry, regulation, investment, superannuation, risk and consumer finance, you can contact Tahn at [email protected] --------------------------------------------------------------------- Thursday 17th Nov 2022 --------------------------------------------------------------------- Comments0 --------------------------------------------------------------------- --------------------------------------------------------------------- Print Article --------------------------------------------------------------------- ASIC chair Joe Longo ASX australian stock exchange CHESS Reserve Bank of Australia --------------------------------------------------------------------- Related Article [svg][Untitled-design-2022-11-17T103] Life insurance commissions consent concerns 'misinformed': AFA Concern about Michelle Levy's insurance advice consent proposal is off the mark and shouldn't get in the way of reform, the association's chief executive says. Tahn Sharpe | 17th Nov 2022 | More --------------------------------------------------------------------- Related Article [svg][Untitled-design-2022-11-17T111] Vanguard aims to undercut competitors with lifecycle super fund Vanguard Australia recently launched a superannuation product aimed at undercutting competitors, with a low-cost default fund option that adjusts automatically as savers age. Lisa Uhlman | 17th Nov 2022 | More Home / Transactions / ASX drops plan to replace CHESS with blockchain, writes off $250M ASX drops plan to replace CHESS with blockchain, writes off $250M The long-running project has been shelved after a devastating Accenture report cited multiple areas of concern. ASIC chair Joe Longo said the ASX "failed to demonstrate appropriate control". [svg][Untitled-design-2022-11-17T105900]Transactions The Australian Stock Exchange has halted its long-running project to swap out the CHESS settlement and clearing system with blockchain technology, after a scathing independent report from Accenture highlighted a lack of readiness, "complexity in the integrated solutions" and project governance issues. The project, which has dragged on for seven years, will now be "reassessed", the ASX stated in a media release this morning, with the abandoned software being "derecognised" at a gross cost of $245 million to $255 million. The Accenture report, which was commissioned by the ASX after the project - first announced in 2015 - experienced its fifth delay in August, identified "significant challenges with the solution design and its ability to meet ASX's requirements," the ASX stated. The report estimated the application software for the new system is still only 63 per cent complete, with an "uncertain" timeline to completion, while complexity in the way the ASX requirements interact with the application and underlying ledger makes supportability, scalability and stability for the ASX's primary functions "challenging". In a further indictment, Accenture highlighted governance flaws on both the ASX and delivery partner sides, including "inefficiencies in the delivery lifecycle through to testing, with siloed execution and reporting resulting in misaligned views of status on delivery progress, risks and issues." The CHESS replacement project was put forward as a huge leap into a more integrated and efficient clearing and settlement system by the ASX when announced. The exchange still had its project microsite up at the time the project was pulled - it's positive spin a grim reminder of what the ASX hoped it to be. "The replacement of CHESS... enables the industry to meet and respond to changing local and global markets, and promote further innovation through new levels of functionality, open standards and flexible technology," the site stated. Commenting on the announcement, ASX chairman Damian Roche said "significant challenges" needed to be addressed. "We began this project with the latest information available at that time, determined to deliver the Australian market a post-trade solution that balanced innovation and state-of-the-art technology with safety and reliability," Roche stated. "However, after further review, including consideration of the findings in the independent report, we have concluded that the path we were on will not meet ASX's and the market's high standards." Amid reassurances that the legacy CHESS system remains secure and stable, CEO and managing director Helen Lofthouse (pictured) said that while the ASX is "keen to embrace technology", the solution design employed in the blockchain project needed to be revisited. "The independent report, coupled with our own assessment work, confirms a number of significant challenges associated with aspects of the CHESS replacement project," Lofthouse stated. "These findings provide valuable inputs to helping us determine a revised solution. We have some work to do before updating and consulting with stakeholders more deeply." In a joint statement, ASIC and the Reserve Bank of Australia called the development a "significant setback" in the replacement of critical national infrastructure. "ASX has rightly recognised that pausing the program while it revisits the technology design for the CHESS replacement was a necessary decision," ASIC chair Joe Longo stated. While supporting the ASX's move to pull the pin, Longo was clear in his assessment that the project's failure lay at the feet of the exchange. "ASX has failed to demonstrate appropriate control of the program to date, and this has undermined legitimate expectations that the ASX can deliver a world-class, contemporary financial market infrastructure," Longo stated. --------------------------------------------------------------------- --------------------------------------------------------------------- [svg][1623907035209-150x15] Tahn Sharpe Tahn Sharpe is managing editor across The Inside Network's publications. A journalist, editor and former financial adviser who writes on the advice industry, regulation, investment, superannuation, risk and consumer finance, you can contact Tahn at [email protected] Thursday 17th Nov 2022 0 --------------------------------------------------------------------- ASIC chair Joe Longo ASX australian stock exchange CHESS Reserve Bank of Australia Print Article --------------------------------------------------------------------- Recent * [svg][Untitled-design-2022-11-17T103706] Life insurance commissions consent concerns 'misinformed': AFA Tahn Sharpe | 17th Nov 2022 | More * [svg][Untitled-design-2022-11-17T111132] Vanguard aims to undercut competitors with lifecycle super fund Lisa Uhlman | 17th Nov 2022 | More * [svg][Untitled-design-2022-11-17T113613] Alceon's private debt fund remains resilient despite rising input costs and higher rates Ishan Dan | 17th Nov 2022 | More Hayden Nicholson, Bell Potter Securities * [svg][Of4iikAZOW] Angela Ashton - The Evergreen Responsible Investment Grading Index (ERIG Index) Related Transactions [svg][Untitled-design-2022-11-17T113613] Alceon's private debt fund remains resilient despite rising input costs and higher rates Alceon Group maintained its view that the sector will remain strong for the remainder of this year given its robustness and healthy deal pipeline. 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