• Accenture review triggers pause in ASX DLT CHESS project
• ASX will cancel an investment of 250 million Australian dollars (169 million dollars)
• ASX appoints a new project manager
• Regulators express their discontent

Following a review by Accenture, the Australian Stock Exchange (ASX) halted its DLT-based replacement project for its CHESS settlement platform, which began in 2016. In August, a further delay to the project was announced after ASX and technology provider Digital Asset identified scalability and resiliency issues in certain parts of the project.

As a result of Accenture’s review, the stock exchange is canceling all of its equity investment in the CHESS replacement project, which it estimates to be between A$245 million and A$255 million ($169 million) before tax. .

ASX has also appointed a new project manager, Tim Whiteley. The addition of a new leader seems understandable from a management point of view, but technical projects require continuity. So this, combined with some of Accenture’s findings and the financial write-off, means that there is only a slim chance that the project will survive in its current form.

This was reinforced by comments from new ASX CEO Helen Lofthouse. “To be clear, the derecognition charge reflects the uncertainty of the future value of the current solution design. It does not prevent us from using parts of what we have already built if we determine that there are adjustments we could make to our current design that will allow it to meet the high standards of ASX and the market.”

Securities regulator ASIC and the Reserve Bank of Australia released a joint statement criticizing ASX for its management of the project.

“ASX has failed to demonstrate adequate control of the program to date, and this has undermined legitimate expectations that ASX can offer a contemporary world-class financial market infrastructure. said ASIC President Joe Longo.

“Regulators are closely monitoring the ongoing clearing and settlement management of ASXs under their licences.”

One of the big concerns is that industry players have already invested time and money in adapting their systems to fit the new CHESS system.

technical conclusions

Accenture assessed the project as 63% complete, but had reservations about managing the project between ASX and Digital Asset. Their biggest concern seemed to be design and complexity.

Consultants praised Daml’s smart contract language (with a few caveats) and the quality of Digital Asset’s code. But distributed architectures present latency and scalability issues. In this project, ASX is the sole arbiter of what transactions are recorded. In particular, he questioned why Daml was used for the entire business workflow instead of using it strategically.

Accenture’s view is that more of the business workflow could be implemented outside of the general ledger. This is because clients only see the final result of the workflow, so they cannot verify the calculation that was performed.

Enterprises today favor a federated microservices architecture. This involves many small independent software components. This loose coupling helps with maintenance. Accenture concluded that the replacement CHESS system used by Daml is too coupled, making it difficult to maintain, support, and extend. He also expressed concern about the need for specialized skills to implement Daml.

More to follow.