ASX, TCS put CHESS Release 1 into production for clearing
TCS and ASX have put CHESS Release 1 into production for cash clearing and settlement, marking a milestone in the overhaul of Australia's market infrastructure.
CHESS, or Clearing House Electronic Subregister System, is used to clear and settle trades in eligible financial products. It also manages the transfer of legal title to securities through the CHESS sub-register and handles delivery-versus-payment settlement between buyers and sellers.
The first release introduces a new clearing component as part of ASX's broader CHESS replacement programme. ASX is delivering the project in two stages following consultation with industry participants, an approach intended to manage change and reduce implementation risk in a critical system.
TCS provided TCS BaNCS for Market Infrastructure and Quartz Gateway for the rollout. The cloud-hosted system has been benchmarked to handle more than 20 million trades a day.
The new platform supports multiple asset classes, real-time trade novation and netting. It also connects to several Australian exchanges and supports ISO 15022, ISO 20022 and FIX messaging standards.
Staged rollout
The CHESS replacement has been one of the most closely watched technology projects in Australia's financial sector because of the system's central role in post-trade processing. Completion of the first stage means ASX, TCS and market participants have begun work on the second stage of the programme.
The deployment gives ASX a new foundation for its post-trade clearing and settlement services. The exchange is seeking to modernise ageing infrastructure while limiting disruption for brokers, clearing participants and other users connected to the system.
"Release 1 of the CHESS Project marks a significant milestone in the modernisation of Australia's critical market infrastructure supporting post-trade clearing and settlement services," said Tim Whiteley, chief information officer, ASX. "With CHESS Release 1 in production, ASX is very proud of the outcomes achieved with TCS as our technology partner having deployed a modern, secure, resilient and scalable solution for the Australian market. Leveraging the expertise of TCS and their experience with markets infrastructure in other jurisdictions has enabled us to confidently put Release 1 into production and we are progressing with Release 2, targeted to go-live 2029," added Whiteley.
Technology platform
TCS said its market infrastructure software is designed for exchanges, central counterparties and central securities depositories. The platform covers issuance, clearing, risk management, depository and registry operations, as well as collateral management, repo, and securities lending and borrowing.
Quartz, which complements the core platform, provides industry integration tools and supports services including decentralised settlement and tokenisation based on distributed technology. It also supports coexistence between ISO 15022 and ISO 20022 messaging standards during market transitions.
One immediate benefit for ASX is the ability to support high transaction volumes in a cloud environment. In market infrastructure, that is important because clearing and settlement systems must handle peak activity while maintaining continuity for participants across the market.
"We are proud to have partnered with ASX on their modernization strategy and the successful Go-Live of CHESS Release-1," said R Vivekanand, President, BFSI Products and Platforms, TCS. "Together, we have smoothly implemented a world class platform that sets a strong foundation to drive the future growth and development of Australian financial markets. The rich functionality and straight through processing capabilities of TCS BaNCS and Quartz establishes our next-generation platform as a leader in the post-trade landscape. We now look forward to working with ASX on a similar seamless execution in Release-2," added Vivekanand.
Market impact
TCS has operated in Australia for more than 35 years and has offices in five locations across the country. It serves most of the region's top 10 listed companies and reported consolidated revenue of more than USD $30 billion in its latest fiscal year.
The CHESS replacement remains a major undertaking for ASX and the wider market because the system sits at the centre of equity trade processing in Australia. With Release 1 now live, the project moves into its next stage, with industry participants already engaged in work on Release 2.