ASX’s CHESS problem sinks Australia’s finance centre ranking
Australia has lost its reputation for being at the cutting edge of financial markets technology, and its restoration requires the ASX to face more competitive pressures and for regulators to encourage blockchain’s homegrown adoption.
Research by Mandala Partners found major global markets are testing distributed ledger technology to create more efficient processes that reduce trading costs and risks for investors, despite ASX’s bungling of the CHESS replacement project and apparent cooling on a blockchain-based future.
The collapse of the ASX’s CHESS replacement project in November last year has left Australia dithering as global market operators build new systems that will push their markets closer to real-time settlement. David Rowe
The analysis – commissioned by FinClear, which provides post-trade services for many mid-market stockbrokers – was released at an event in Sydney last Thursday, attended by about 100 people, including brokers, analysts, ASX executives and regulators from the Reserve Bank and ASIC.
Australia has slumped down the Global Financial Centres Index: Sydney fell from seventh place to 13th, while Melbourne sunk from 18th to 31st, measured over the 15 years from 2007 to 2022. Sydney has been unseated by Chicago, San Francisco, Los Angeles, Shanghai, Beijing, Shenzhen, Seoul and Paris during the period.
Australia was at the forefront of global financial markets technology in the early 2000s as it moved to electronic trade execution and ASX’s identification of a blockchain-type application, when it kicked off the CHESS replacement in 2015, was ahead of its time.
But the collapse of that project in November last year has left Australia dithering as global market operators build new systems that will
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