ASX Defers Settlements Due to CHESS Systems Failure

(Reuters) – Australian bourse operator ASX will defer the day's settlements to Monday after its Clearing House Electronic Subregister System (CHESS) software broke down and it was unable to resolve issues, it said on Friday.

The stock exchange operator mentioned that it was receiving trades from approved market operators, but demand and registry transaction processing have been paused.

ASX indicated that no settlements transpired on Friday due to a "CHESS batch settlement delay".

Usually, ASX's aging all-in-one CHESS system settles a trade two business days after an agreement is made between buyer and seller regarding money transfers. In addition to settlements, CHESS electronically registers ownership of shares on its subregister.

"ASX is making every effort to identify the root cause and will share any developments as soon as they are made available," the company stated. They added that they had initiated the process to reschedule instructions from the CHESS settlement batch to Monday.

This outage follows a drop in the S&P/ASX 200 benchmark index, which closed 1.2% lower, marking its lowest level since mid-September.

ASX had been working on replacing CHESS software with blockchain technology but ceased the project in November 2022, six years after its announcement, due to concerns about complexity and scalability. Last year, ASX engaged India’s Tata Consultancy Services (NS:TCS) to overhaul the software in a two-stage product-based route slated for completion by 2029.