Australian stock exchange operator ASX has announced a strategic partnership with Tata Consultancy Services (TCS) to revamp the former’s trading, clearing, and settlement system. This move follows ASX’s withdrawal of a blockchain-based system overhaul last year, which faced criticism and resulted in a significant writedown.
ASX’s plan involves implementing a new product-based platform in two major releases. The initial release will focus on delivering the clearing service, followed by the second release addressing settlement and sub-register services. The estimated cost for the first release is projected to be between $105 and $125 million, spread over multiple years.
TCS’s modular technology platform, TCS BaNCS for market infrastructure, will be leveraged for the project. This platform is designed for clearing and settlement services and is already used by exchanges globally. ASX emphasised that the versatile design of the TCS product accommodates diverse clearing and settlement models and account structures used worldwide.
The decision to partner with TCS considered input from various committees, aligning with industry objectives and project scope considerations. The failure of ASX’s earlier blockchain-based project prompted reassessing its approach to ensure a more successful and less disruptive implementation.
The project’s first stage, focusing on clearing software, is expected to cost between A$105 million and A$125 million, with delivery targeted around 2026. The cost and timing of the settlement and other software will be decided in 2024.
This strategic partnership represents ASX’s commitment to enhancing its trading infrastructure, addressing industry needs, and mitigating risks associated with major system changes.