Australian stock exchange operator ASX postpones settlements after CHESS software failure

(Reuters) – Australian stock exchange operator ASX will postpone that day’s settlements to Monday after its Clearing House Electronic Subregister System (CHESS) software broke and the problems could not be resolved, it said on Friday.

The exchange operator said it was receiving transactions from approved market operators, but processing of demand and registry transactions has been suspended.

It added that no settlements took place on Friday due to a “delay in CHESS batch settlement”.

ASX’s legacy all-in-one CHESS system usually completes a transaction two business days after a buyer and a seller agree to the transaction by arranging money transfers.

Along with the settlements, CHESS electronically records ownership of shares in its sub-register.

“ASX is making every effort to determine the cause and will share any developments as they become available,” the company said.

It added that it had initiated the process to move instructions from the CHESS settlement batch to Monday.

The outage comes after the benchmark S&P/ASX 200 index ended 1.2% lower – its lowest level since mid-September.

ASX was looking to replace the CHESS software with blockchain-based technology, but halted the overhaul in November 2022, six years after it was announced, citing concerns about the complexity and scalability of the product.

Last year it hired India’s Tata Consultancy Services to overhaul its software, opting for a two-phase product-based route to be completed in 2029.

(Reporting by John Biju in Bengaluru; Editing by Sonia Cheema)