The investment ASX is making in the capacity and resilience of its systems is critical to stakeholder confidence and to safe and reliable market operations.

We have upgraded our post-trade infrastructure following the rapid and very large increase in trading activity in March 2020 (at the height of the global pandemic), when the daily record more than doubled to 7.1 million trades, and the industry, including ASX systems, experienced processing delays.   

ASX has enhanced the CHESS system to accommodate approximately 50% greater than the previous maximum observed volume, and can now cater for 10 million trades per day, over multiple consecutive days.  This has been achieved by continued hardware refinement and processing efficiencies.

Related downstream system capacity is also being upgraded to ensure the sustainability of end-to-end capacity levels.  Currently, the end-to-end solution can cater for the daily record volume of approximately 7 million trades without processing delay.  It is planned that progressive uplifts in system capacity and performance for these downstream systems will enable the reaching of the 10 million trades per day (that CHESS can now process) without associated delays, before the end of 2021.  This provides significant headroom, noting that the average volume in 2021 has been 2.1 million trades per day.

Improvements to capacity are an ongoing focus for ASX, with the CHESS replacement project recently consulting on changes to netting and settlement workflow to ensure even greater scalability in the future.

Additionally, a new contingency arrangement for Approved Market Operator transaction registrations in CHESS has been successfully tested and implemented.

ASX has also engaged with a cross-section of CHESS users to better understand the impacts from service interruptions and to improve communications during potential delays.  The engagement was constructive and insightful. In particular, the industry sought clarity on the detailed steps within the CHESS settlement batch processes to fulfil DvP of settlement obligations.

ASX has developed the attached document to aid understanding for Participants and Payment providers. This provides an overview of the different operational and communication processes for CHESS batch settlement. These processes are completed every business day as part of daily batch settlement to effect the irrevocable settlement of payment and securities:

• Process A: Settlement Extract - CHESS extracts all settlement obligations for today’s settlement date
• Process B: Address Securities Shortfall - CHESS identifies failed settlements due to insufficient securities
• Process C: Fund Obligation Authorisation - CHESS determines fund obligations per Settlement Participant for today’s settlements
• Process D: Address Payment Shortfall ‘if applicable’ - CHESS identifies failed settlements due to rejected fund obligation
• Process E: Fund Obligation to RBA (RITS) - CHESS sends to RITS net payment/receive values, per payment provider
• Process F: Fund Settlement at RBA (RITS) - paying payment providers approve payment in RITS. Deduct paying and credit receiving payment providers’ ESAs
• Process G: Securities Movement: Securities moved between Entrepot HINs of delivering and receiving participants.

What do I need to do by when?

For information only.

Need more information?

Issued by

Val Mathews

Chief Customer and Operating Officer

Contact information

Suzy Munro

General Manager | Clearing & Settlement Operations

Email: Suzy.Munro@asx.com.au

Phone: 02 9227 0304

Brendan Laird

Senior Manager | Settlement Operations

Email: Brendan.Laird@asx.com.au

Phone: 02 9227 0251

Equity Operations

T 1800 814 051
E chesshelp@asx.com.au   

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