The ASX has been working with DLT specialist Digital Asset since 2017 to replace its Chess post-trade settlement system with a blockchain-based platform. Initially set for go-live in April 2021, the project has suffered multiple delays.

In August, the exchange operator called in Accenture to run the rule over the project. Accenture has now reported back with a devastating critique, identifying problems with the complexity of the system, application readiness and issues with vendor management.

ASX Chairman Damian Roche says that "we have concluded that the path we were on will not meet ASX’s and the market’s high standards. There are significant technology, governance and delivery challenges that must be addressed."

ASX says it will write off between A$245 million and A$255 million, pre-tax, related to the project. The exchange could also have to compensate trading firms, which are estimated to have spent around A$100 million upgrading their own systems in preparation for the new network.

ASX says that it now needs to carry out further planning to evaluate a replacement for Chess, stressing that the current system "remains secure and stable, and is performing well".

Referring to the Accenture report findings, Joe Longo, the chair of regulator Asic, says: "That these findings can be made at this late stage of a critical replacement program is altogether unsatisfactory."

Adds Longo: "The regulators are closely monitoring ASX’s ongoing management of clearing and settlement under its licences. Our immediate focus is to ensure current Chess continues to provide the level of service, reliability and resilience that is required. The regulators will bring to bear the full range of regulatory options to ensure this is the case."