Can TCS Help Australia’s Securities Exchange Operator Overhaul Its Software Rebuild Woes?

It was over a year ago that Australian Securities Exchange Ltd. AKA ASX, Australia's primary securities exchange operator, revealed that a rebuild of the stock exchange’s old software was almost ready.

Seven years in the making, the new software was built using blockchain technology and was set to make ASX the first stock exchange to use blockchain technology.

At the time, Tim Hogben, the Head of Securities and Payments for ASX Ltd., said, “Ninety-six percent of the software is currently in an operating-and-test environment. That 96% of that software is working,” and added, “If it wasn't working, you'd be hearing about it, let me tell you.”

However, in November ASX abandoned the project.

It was believed that an Accenture review found only 63% of the software was delivered and over 50% of the code had to be written. Other issues included dysfunctional management, product complexity and scalability concerns, difficulty finding expert support and repeated delays.

This saga led to wavering trust in ASX and came at the cost of a A$176.3 million (approx. $115 million USD) writedown.

Cut to today and ASX has a new announcement regarding its software rebuild plans. What’s it all about? Let’s explore!

 

What’s ASX’s New Announcement About?

 

• ASX recently made an announcement saying it has hired India’s Tata Consultancy Services to rebuild and overhaul its previous clearing and settlement software, called CHESS (Clearing House Electronic Subregister System).

• The move will do away with its blockchain-based initiative and trade it in for a path that offers more caution and less customization. The delivery timeframes being based on a range of factors, including stakeholder consultation and detailed planning.

• While the switch will come in stages rather than one go, it projects an implementation date of 2028 or 2029. Furthermore, the estimated cost of the first release of the project would be between $105 and $125 million and would be incurred over multiple years.

• An excerpt from ASX’s announcement read, “ASX has completed its reassessment of the solution design to replace CHESS and will proceed with a product based solution to be delivered by global technology provider TATA Consultancy Services (TCS). The CHESS replacement project will now move to the next phase of detailed design and implementation, with further stakeholder consultation to commence in the first quarter of 2024.”

• India’s TCS is a recognized global technology services provider plying in exchanges around the world, which includes Finland, South Africa, New Zealand and is underway in Canada.

• Furthermore, ASX also entered into an agreement with Accenture in the role of solution integrator, to support the project delivery. It will also provide “additional capability and capacity in technology project delivery and industry expertise.”

 

What Did The Stakeholders Have To Say?

 

• In an announcement made on ASX’s website, Helen Lofthouse, the CEO and Managing Director of ASX, said, “When we took the decision to reassess the CHESS replacement solution design, we wanted to select a solution that would serve the whole market, and to do that we needed extensive input from our customers and industry stakeholders. We significantly increased engagement during 2023 and the selected product, implementation approach and scope reflect discussion and feedback from various forums.

• Lofthouse further said, “This 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.”

• Vivekanand Ramgopal, the President for BFSI Products and Platforms at TCS, said, “Our selection is an affirmation of our track record in this mission-critical business, continuous investments in our products, and shared vision of how we see the future of market infrastructure institutions in a technology-led world.”

Do you think other securities and stock exchanges will still consider using blockchain-based solutions?

Let us know in the comments below!