ASX announces opening of Customer Development Environment for DLT testing

ASX has just announced that it has successfully opened the Customer Development Environment (CDE) for its new equities clearing and settlement system to replace CHESS, which is based on distributed ledger technology (DLT).

The first of seven ‘drops’ of software code was made available to customers on April 30, 2019. Additional functionality is poised to be released at approximately eight-week intervals, culminating in full functionality in the CDE by mid-2020.

Cliff Richards, ASX’s Executive General Manger Equity Post-Trade Services says:

“We are proud of this achievement and very grateful for the support of our partner Digital Asset and our customers. While we believe distributed ledger technology 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.”

The opening of the CDE allows customers to interact and experiment with the new system. Once connected, users can design, build and test system changes, access some of the new business functionality, and compare various access options.

Customers can connect to the new system directly via a DLT node, which provides access to real-time, synchronised, source-of-truth data. This innovation is designed to reduce costs and complexity, and facilitate new business opportunities for intermediaries, issuers, investors and other users. While ASX encourages this mode of connection, other access options are also available, including the ISO 20022 global messaging standard via AMQP and SWIFT, and a web browser for low volume, infrequent usage.

ASX is on-track to go-live with the new DLT-based system in March-April 2021. The timetable and functionality reflect what the market has asked for through ASX’s extensive public consultation process.

ASX has been working since January 2016 with its technology partner Digital Asset to examine and test the ability of a DLT-based system to underpin the replacement of CHESS. This process led to the decision in December 2017 to proceed with a DLT-based solution.

In April 2018, ASX released a consultation paper, CHESS Replacement: New Scope and Implementation Plan. A total of 41 written submissions were received.

The Exchange has noted the strong interest in exploring and understanding different connectivity options. Access to DLT-nodes is being prioritised for existing clearing and settlement participants (and their CHESS accredited vendors).