ASX selects distributed ledger technology to replace CHESS
ASX today announces its intention to replace CHESS using distributed ledger technology (DLT) developed by its technology partner Digital Asset (DA).
CHESS (Clearing House Electronic Subregister System) is the system used by ASX to record shareholdings and manage the clearing and settlement of equity transactions in Australia. It was world-leading when introduced in the 1990s, providing name-on-register functionality, electronic communications and removing paper share certificates. It continues to be a robust and reliable system. ASX is now taking the opportunity to replace CHESS with a next generation post-trade platform using contemporary technology.
Today's decision follows the successful build of enterprise-grade DLT software for core equity clearing and settlement functions, and the completion of extensive suitability testing by ASX and DA over the past two years. The testing confirms ASX's confidence in the functional, capacity, security and resilience capabilities of DA's application of DLT to meet the needs of Australia's financial marketplace and maintain the highest regulatory and operational standards. The testing included two independent third party security reviews of DA's technology.
Trading – Cash Markets (including equities, interest rate and warrant trades)
• In November 2017, the average daily number of trades was 11% higher than the pcp. The average daily value traded on-market of $4.2 billion was down 9% on the pcp.
• Volatility (as measured by the average daily movement in the All Ordinaries Index) was 0.3% in November, in line with the previous month (0.3%).
• Expected future volatility (as measured by the S&P/ASX 200 VIX) in November was an average of 11.7 (compared to 11.3 in October).