ASX picks Tata's BaNCS and Accenture in CHESS replacement project

ASX picks Tata's BaNCS and Accenture in CHESS replacement project

TCS will supply its BaNCS product while Accenture will do the solution integration and project delivery work.

Credit: Supplied

The Australian Securities Exchange has engaged with Tata Consultancy Services (TCS) and Accenture for its multi-year, multi-million-dollar CHESS replacement project. 

It will now move to the next phase of detailing the design and implementation with further consultation to commence in the first half of 2024. 

The project will now involve TCS' BaNCS for Market Infrastructure product, featuring a modular technology platform for clearing and settlement services. It will be implemented over two main releases with the clearing service delivered first and the settlement and sub-register services to follow in a second release. 

Accenture will be supporting the ASX’s project delivery as the solution integration partner and will also provide additional capability and capacity in technology project delivery and expertise.

The staged approach aims to reduce delivery risk and manage impact on industry stakeholders. 

The first phase of the project is estimated to cost $105 million to $125 million. 

The ASX claims the product will provide a reliable, supportable and scalable platform that satisfies the license obligations of ASX Clear and ASX Settlement and has the potential to support new services and innovation from the ASX and other providers. It is already being used in other markets globally including Finland, South Africa and New Zealand and is currently being implemented in Canada.

Stakeholder input has been a key element of the decision to side with TCS. Input came from the CHESS Replacement Technical Committee, the ASX Business Committee and the Cash Equities and Settlement Advisory Group. 

The next consultation with stakeholders will take place in the first quarter of 2024 and will cover the high-level project plan and an indicative timeline focused on design, scope and timing for each release. 

“We had clear objectives for our selection process. These included meeting current and future market needs and our licence obligations, enabling a safe transition from the incumbent platform, minimising industry impacts where possible and having the capability to provide interoperability and facilitate future innovation as driven by market demand,” ASX CEO and managing director Helen Lofthouse said. 

“The next phase of the project will be a multi-year undertaking and ASX will maintain our investment in the current CHESS platform to ensure it continues to operate efficiently and reliably until the replacement is implemented.”

ASX engaged with Accenture in August last year to help conduct a review after delays of the new system rollout. 

In 2017, following two years of evaluation, the ASX confirmed it was spending $50 million in replacing its decades-old Clearing House Electronic Subregister System (CHESS) with blockchain-inspired distributed ledger technology (DLT) developed by US software firm Digital Asset.

CHESS has been used to record shareholdings and manage the clearing and settlement of equity transactions in Australia since it was introduced in 1994. 

The exchange wanted to take the opportunity to replace it with “a next generation post-trade platform using contemporary technology” but ditched the entire project citing significant technology, governance and delivery challenges in $250 million CHESS project failure.

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