Following public lobbying by main partakers, the Australian Stock Exchange (ASX) has postponed its transition to blockchain. As per an update issued yesterday, the ASX exchange has stated that it is postponing the deferred launch of Distributed Ledger framework to substitute its prevailing system for handling equity trades.
ASX now intends to begin the endeavor of substituting the Clearing House Electronic Subregister System (CHESS) in April 2022, reflecting a one year delay from the earlier schedule.
The exchange has pointed out several reasons for the postponement, including the Covid-19 pandemic, accepting modifications sought by participants and paving way for huge strides in technology advancement. Peter Hiom, ASX Deputy CEO, underlined that the exchange had “listened to the diverse views of stakeholders and accommodated feedback on timing, user readiness and changes to functionality.”
He stated that the new CHESS system would “underpin Australia’s financial markets for the next decade and beyond.” While unveiling the ASX’ blockchain system, there was heavy lobbying by CHESS users for postponement, with some of them pointing to lack of clarity in regarding to transition. The timeline of transition was being worked out since March, when ASX stated that due to pandemic, it would consider suggestions in June regarding the launch.
Computershare, one of the top share registry firms in Australia, asked for two year postponement while having discussions with the ASX.
The company has stated that it has not received any crucial data about how the blockchain platform would function or any variation in charges that may be necessary for such facilities.
Tony Cunningham, who established CPS Capital, a Western Australian stockbroker, also opined that a postponement might be adequate to better explain the manner in which distributed ledger technology (DLT) would function at ASX for share broking and registry.
ASX, being the first renowned stock exchange to undertake the implementation of DLT, started preparing to shift to blockchain on December 2017.
In May 2019, the exchange published the first code for the blockchain powered tool that can act as a substitute. Last October, the Australian associate of alternative market operator Chi-X, the only competitor of ASX during tht period, demanded scrutiny of the likely impact of blockchain technology on trading activities by the Australian Competition and Consumer Commission.
Before the spread of Covid-19, the scheduled rollout of CHESS was on April 2021.
