As part of the annual report 2018, Australian Securities Exchange (ASX) has finally shared a comprehensive business strategy for the implementation of distributed ledger technology (DLT) to govern their trusted infrastructure. As futuristic technologies are rapidly transforming the financial sector, Dominic Stevens, CEO of ASX has plans to introduce one of the largest implementations of DLT.
Stevens shared these plans during the presentation of ASX annual results wherein he also announced an underlying net profit worth of $465.3 million, a jump of 7.2 per cent. The sixteenth largest exchange of the world envisions to leverage new technologies for driving efficiency and delivering benefits to all stakeholders.
Acknowledging the importance of technological breakthroughs, Stevens also mentioned that the exchange plans to raise its capital expenditure for the technology program to around $70-75 million, a jump from $50 million. One of the most prominent changes is going to be the replacement of CHESS, ASX’s core system responsible for processes of clearance, settlement, and asset registration along with other post-trade services. After serving the Australian market for over 20 years, CHESS will be succeeded by distributed ledger technology (DLT).
The new system driven by DLT is expected to begin operations between September 2020 and March 2021 after two years of extensive research and testing. Its application will further depend on stakeholder readiness. “A DLT-based system will improve record keeping, reduce reconciliation, enable more timely transactions and generate a better quality source of truth data for our customers,” shared Stevens. Such application of technology will also foster product and service innovation across the industry in ways we can’t conceive today,” he added.
By choosing DLT for its new equities clearing and settlement system, ASX plans to deliver improved efficiencies via better record keeping, more timely transactions, reduced reconciliation, and more reliable quality source of truth data. The final decision for this replacement was taken after thorough consultations with more than 600 people from 120 organisations over a period of 18 months.
With global institutional players like ASX adopting next-gen technologies like DLT, the financial landscape is ripe for an acceleration in growth and development.