Tata Consultancy Services (TCS) and the Australian Securities Exchange have gone live with Release 1 of the CHESS programme for cash clearing and settlement, marking a milestone in the overhaul of Australia's post-trade market infrastructure.
Release 1 delivers the new clearing component of CHESS, the system used to clear and settle trades in eligible financial products. It also supports the transfer of legal title to securities through the CHESS sub-register and handles delivery-versus-payment settlement by moving securities and cash between buyers and sellers.
As part of the project, TCS implemented its BaNCS for Market Infrastructure and Quartz Gateway products. The system is designed to support central counterparty clearing across multiple asset classes, with real-time trade novation and netting, and connectivity to multiple Australian exchanges.
It supports ISO 15022, ISO 20022 and FIX messaging standards, is hosted in the cloud, and has been benchmarked to process more than 20 million trades a day, according to the companies.
Staged rollout
ASX is delivering the CHESS replacement in two releases as part of a phased approach designed to manage change and reduce implementation risk for a critical market system. With Release 1 now in production, work has begun on the second stage of the programme with TCS and industry participants.
CHESS sits at the centre of Australia's equities market operations, making its replacement one of the most closely watched technology programmes in the country's financial sector. The update is part of ASX's broader effort to modernise the systems that support post-trade clearing and settlement.
Tim Whiteley, Chief Information Officer at ASX, said the go-live was a significant milestone for the project.
"Release 1 of the CHESS Project marks a significant milestone in the modernisation of Australia's critical market infrastructure supporting post-trade clearing and settlement services. With CHESS Release 1 in production, ASX is very proud of the outcomes achieved with TCS as our technology partner, having deployed a modern, secure, resilient and scalable solution for the Australian market. Leveraging the expertise of TCS and their experience with markets infrastructure in other jurisdictions has enabled us to confidently put Release 1 into production, and we are progressing with Release 2, targeted to go-live 2029," Whiteley said.
The project draws on TCS's market infrastructure software, which supports exchange, central counterparty and central securities depository operations across a range of asset classes. Those functions include issuance, clearing, risk management, depository and registry tasks, as well as collateral management, repo, securities lending and settlement.
TCS said its Quartz software is used for standards-based integration and can support decentralised settlement and tokenisation using distributed ledger technology. The coexistence of ISO 15022 and ISO 20022 messaging is intended to ease migration to the newer standard.
Australian market
The launch is a notable project for TCS in Australia, where the Indian technology services company has operated for more than 35 years. It works with most of the country's top 10 listed companies and has operations in five Australian locations.
R Vivekanand, president of BFSI Products and Platforms at TCS, said the first stage of the programme had laid the foundation for the next phase.
"We are proud to have partnered with ASX on their modernization strategy and the successful Go-Live of CHESS Release-1. Together, we have smoothly implemented a world class platform that sets a strong foundation to drive the future growth and development of Australian financial markets. The rich functionality and straight through processing capabilities of TCS BaNCS and Quartz establishes our next-generation platform as a leader in the post-trade landscape. We now look forward to working with ASX on a similar seamless execution in Release-2," Vivekanand said.
The CHESS replacement is a long-running transformation of a system that underpins clearing, settlement and securities registration in the Australian market. Release 1 is now in production for cash clearing and settlement, while the broader replacement programme continues with the second release.