ASX opens testing for post-trade blockchain system

ASX is working to replace its equities clearing and settlement system with blockchain technology.

The Australian Securities Exchange (ASX) has opened a Customer Development Environment (CDE) for users to test and interact with its new clearing and settlement system, based on technology developed by Digital Asset.

The first of seven ‘drops’ of software code were made available to clearing banks and custodians on 30 April, according to ASX, with additional functionality due to be released at eight-week intervals, concluding in a full functionality of the CDE by mid-2020.

Cliff Richards, executive general manager for equity post-trade services at ASX, described the unveiling of the testing environment as a major step forward in the replacement of ASX’s Clearing House Electronic Subregister System (CHESS).

“While we believe distributed ledger technology (DLT) offers exciting opportunities for the whole market to innovate, there is much still to do. We continue to work closely with our customers as we progress towards delivery of the new system,” he said.

ASX added that the CDE allows clearing banks, custodians and market participants to interact and experiment with the new system. Once connected, users can design, build and test system changes, access new business functionalities, and compare various access options.

Users can connect to the blockchain system directly via a DLT node, which provides access to real-time, synchronised, source-of-truth data. Other options are also available including the ISO 20022 global messaging standard via SWIFT, as well as through a web browser.

ASX concluded that it is on track with its go-live date for the new DLT post-trade system in March-April 2021, following a delay to the launch from the fourth quarter 2020 in September last year.

“We know our progress is being watched internationally and is an important bellwether for the technology’s adoption,” Peter Hiom, deputy CEO at ASX, concluded. “It represents the first-time market participants anywhere in the world can experience the benefits of ‘taking a node’ and establishing direct connectivity to a golden source of real-time data via DLT.”