Australia’s ASX Turns to Blockchain for Equity Transaction Settlement


Australia’s ASX Ltd said Thursday it would replace CHESS using distributed ledger technology (DLT). CHESS (Clearing House Electronic Subregister System) is the system used by ASX to record shareholdings and manage the clearing and settlement of equity transactions in Australia.

It was world-leading when introduced in the 1990s, providing name-on-register functionality, electronic communications and removing paper share certificates.

According to ASX, it is now taking the opportunity to replace CHESS with a next generation post-trade platform using contemporary technology.

 “ASX has been carefully examining distributed ledger technology for almost two-and-a-half years, including the last two years with Digital Asset, in order to understand its potential application,” said Dominic Stevens, ASX Managing Director and CEO.

“Having completed this work, we believe that using DLT to replace CHESS will enable our customers to develop new services and reduce their costs, and it will put Australia at the forefront of innovation in financial markets.”

The new system will be operated by ASX on a secure private network where participants are known, ‘permissioned’ to have access, and must comply with ongoing and enforceable obligations. The transition period to the new system will be determined in consultation with stakeholders, said ASX.