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Stakeholder engagement

Collaborating with all stakeholders across a broad range of forums to educate, support, build and test a new system for a seamless transition

Stakeholder engagement

ASX has given careful consideration to how best we engage with industry to elicit the feedback required from all stakeholder groups to develop and implement the system that will replace CHESS. To date, we have adopted an approach involving both formal broad-based public consultation, and a range of committee and working group forums. These stakeholder forums have sought input across the spectrum from high level business requirements and functionality to detailed technical information. ASX will continue to undertake a mix of public consultation and direct engagement with users throughout the project. Bilateral engagement will also be undertaken where required to respond to customer queries and discuss particular topics in greater detail.

Engagement forums

The key forums for engaging with stakeholders are the Business Committee; Technical Committee; Software Provider Readiness Working Group; Implementation & Transition Working Group; Connectivity & Integration Working Group and Focus Groups. The calendar of events will be updated over time and is subject to change. ASX will send out invitations to relevant attendees prior to each event.

Public consultation

On 18 February 2021, ASX released its consultation paper on CHESS Replacement: Proposed changes to netting and settlement workflow. The consultation paper outlines proposed changes to the design of both the netting and settlement confirmation workflows to deliver processing efficiencies and reduce subsequent messaging volumes as part of the overnight end-of-day process and daily batch settlement.

The proposed changes will allow the CHESS replacement system to support clearing and settlement of significantly greater trading volumes and are largely in response to the extreme record trading activity in March 2020, which redefined the Day 1 capacity requirements of the replacement system.

Clearing and settlement and settlement only participants, software providers and approved market operators are expected to be impacted by the proposed changes.

ASX is seeking the following feedback from impacted stakeholders on the proposed changes to netting and settlement workflows: 

  1. For impacted participants, what impacts do the proposed changes have on your overall business processes, operations, and systems (e.g. cessation of NBO, introduction of NNDP, and/or the settlement confirmation changes)?
  2. For impacted participants and software providers (third party vendors and those developing in-house), can the proposed solution design be enhanced or supplemented to assist with the implications of the proposed changes for existing business processes, operations and systems? 
  3. For impacted participants and software providers, what impacts do the proposed changes have on your organisation’s technical readiness activities for accreditation commencing from late April 2022 and/or operational readiness activities commencing from September 2022?
  4. For AMOs, do you see benefit in allowing for trade cancellation after trade date for trades executed on your market? 

The consultation period closed on 18 March 2021.

ASX will consider all feedback with an aim to publish the functional specifications and messaging requirements relevant to the proposed changes at the end of March 2021.  ASX intends to release a formal response to consultation feedback ahead of the functional code release planned for end June 2021.

Response

On 30 June 2021, ASX published its response to consultation feedback from the 18 February 2021 consultation paper on changes to netting and settlement workflows to ensure the new system is sufficiently resilient to withstand record trading volumes like those experienced during March 2020. The response sets out the confirmed solution design including the revisions ASX has made in response to the feedback received.  It also summarises the key themes from the consultation process and ASX’s reply. 

ASX thanks the 30 organisations who participated in the consultation and provided their feedback.

2020 Consultation on the CHESS Replacement Revised Implementation Timeline


On 30 June 2020, ASX released its consultation paper on the CHESS Replacement Revised Implementation Timetable. The paper set out key project activities and milestones including system development and testing, user testing, technical accreditation, operational readiness and operating rule amendments. 

Feedback was sought from CHESS users on their ability to meet a revised implementation timetable produced by ASX, with a new go-live date of April 2022 (12 months beyond the original target go-live) to:

  • provide additional time for the ongoing impact of the COVID-19 pandemic on all stakeholders;
  • accommodate functionality changes requested by users; and
  • have a longer period for ASX and CHESS users to complete their respective development and readiness activities. 

The consultation period closed on 28 July 2020 and ASX issued a media release with early observations on 5 August 2020. 

On 28 October 2020, ASX released its response to consultation feedback on the CHESS Replacement Revised Implementation Timetable. The paper includes a summary of the responses received from 100 organisations and confirms the new go-live date as April 2023. It also involved engagement with regulatory agencies, detailed discussions with our technology partners and completion of a comprehensive project review. 

A copy of ASX’s media release can be found here

ASX needs to make rule amendments to facilitate the implementation of the new system that will replace CHESS. These rule amendments are being progressed through three tranches. 

The consultation rounds on the first and second tranches of draft rule amendments to support the new system have now been completed. A further final round of consultation incorporating both the third tranche of draft rule amendments to support the new system and a consolidated rules package across the three tranches commenced 31 August 2021, with a 15 week consultation period concluding 14 December 2021.

The rule development timeline captures the key dates for the regulatory and public consultation processes across the three tranches of rule amendments for Day 1 of the new system. It also covers rule amendments addressing new business requirements generated through industry consultation for CHESS Replacement but which are not dependant on the new system and which have now been delivered through ASX business as usual (BAU) processes or the Corporate Actions STP Phase 2 Project. The timeline shows both completed and upcoming processes.



Public Consultation on Tranche 1

The first tranche of operating rule amendments was released for public consultation on 15 November 2019, with the period for feedback closing on 17 January 2020. The content related to accounts, participants, securities and pre-settlement aspects for Day 1 CHESS replacement system functionality. 

ASX received a total of 12 submissions from a range of stakeholders including participants, registries, industry bodies and vendors. 

On 22 May 2020, ASX released its response to consultation feedback received on the tranche 1 draft rule amendments. The response to consultation feedback contains:

  • a summary of feedback received in stakeholder submissions;
  • ASX's response to such feedback; and
  • the draft rule changes made to the ASX Settlement Operating Rules and Procedures and ASX Clear Operating Rules and Procedures, which take into account feedback received.


Public Consultation on Tranche 2

The second tranche of operating rule amendments was released for public consultation on 21 February 2020, with the period for feedback closing on 29 May 2020 (extended from 3 April). The content related to corporate actions, mFund and RTGS payment aspects for Day 1 CHESS replacement system functionality. RTGS supports payments for corporate actions involving entitlement acceptances as well as payments for bilateral demand settlement instructions (addressed in tranche 1 rule amendments).

ASX received a total of 11 submissions from a range of stakeholders including participants, registries, payment providers, an industry body and an approved listing market operator. 

On 24 September 2020, ASX released its response to consultation feedback received on the tranche 2 draft rule amendments. The response to consultation feedback contains:

  • a summary of the feedback received in stakeholder submissions;
  • ASX's response to such feedback; and 
  • the draft rule changes made to the ASX Settlement Operating Rules and Procedures, which take into account feedback received.

ASX’s response to consultation feedback on the revised implementation timetable released in October 2020 removed from Day 1 scope of the new system certain functionality addressed in the tranche 2 rule amendments. As a result, the rules supporting:

  • Electronic acceptance and payment for entitlement offers,
  • CHESS processing of elections as to alternate forms of consideration under schemes of arrangement

have been removed from the consolidated rules package (referred to below) and revised timing for these rules will be considered following Day 1 (with that functionality to be part of a future release (the timing for which is yet to be determined)).

 

Public Consultation on Tranche 3 and consolidated rules package

The third tranche of operating rule amendments as well as a consolidated rules package across all the rule amendments for the new system was released for public consultation on 31 August 2021.  The content in tranche 3 relates to netting, settlement, reporting and miscellaneous amendments for Day 1 CHESS replacement system functionality, including as revised to reflect changes to netting and settlement workflows as consulted on in 2021. As part of the miscellaneous amendments, they also include transitional rules addressing migration aspects for the cutover to the new system.

The consultation paper invites feedback from users and other stakeholders on the operation of the draft tranche 3 rule amendments, including any unintended consequences, as well as the combined package of rule amendments.

Written submissions are requested by Tuesday 14 December 2021.

ASX will provide its response to consultation in early June 2022, ahead of formal lodgement of the combined rules package with ASIC in early September 2022 (subject to regulatory clearance).

 

In April 2018, ASX released a consultation paper, CHESS Replacement: New scope and implementation plan to:

  • Understand whether any important new business requirements have not been captured
  • Invite feedback on the proposed testing and release management strategy
  • Invite feedback on the proposed migration and implementation approach
  • Understand if any particular information was required by stakeholders to assist in transition planning

The consultation period closed on 22 June 2018 and ASX released its response on 4 September 2018 - a summary of the responses received and detailed changes ASX has made to the scope and implementation plan as a result of industry feedback.

A total of 41 written submissions were received including 21 submissions provided on a non-confidential basis.

Note: please refer to ASX’s CHESS replacement dedicated documentation portal for updated information including on the technical solution design, day 1 scope and implementation timetable.

 

In September 2016, ASX released a consultation paper, Replacement of CHESS for Equity Post-Trade Services: Business requirements to:

  • Provide the market with an update on ASX's evaluation of DLT;
  • Set out ASX's preliminary thinking on the business requirements for a system to replace CHESS; and
  • To seek initial views from users on their business requirements.

The deadline for submission of responses was 28 October 2016 and ASX released its response on March 2017. ASX asked for additional information from stakeholders via the Supplementary Business Requirements Questionnaire on 22 December 2016.

ASX received 36 written submissions to the original consultation paper, including 23 that were provided on a confidential basis. This provided valuable input to ASX to run a series of industry working groups on new business requirements from May to November 2017.

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