ASX needs to make rule amendments to facilitate the implementation of the new system that will replace CHESS. These rule amendments have been progressed through three tranches. Market consultation has been undertaken with each tranche of public consultation being published and ASX then providing their response to consultation feedback.
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.
Subject to the regulatory clearance processes, ASX proposes to formally lodge the combined rules package with ASIC in the fourth quarter of calendar year 2022. We propose to publish the final rule changes at least 6 months prior to go live of the new system, noting that certain transitional rules will have an earlier commencement date.
On 7 April 2021, ASX published an information paper on CHESS Replacement issuer readiness. The purpose of this information paper is to inform issuers about some potential changes to their constitution, policies or other documents and ASX’s proposed data governance arrangements for CHESS Replacement (details of which are below).
On 4 December 2020, ASX published an information paper on data governance for CHESS and CHESS replacement. The paper explains ASX’s data governance arrangements for CHESS which will continue to apply under the new system, with only limited updates to the data that is received and how it is managed under the replacement system. Since the paper explains ASX’s approach to data governance under CHESS generally, it is relevant to Day 1 functionality, the release 1.1 features (electronic acceptance and payment for entitlement offers) that will be included in a future release after Day 1, and any other future releases under the replacement system.
ASX has group-wide data governance framework that applies to all data held across the organisation.
ASX’s data governance arrangements for CHESS are shaped by the legal and regulatory framework within which ASX Settlement operates. This includes arrangements to ensure the confidentiality, security and integrity of the data, and compliance with applicable data protection laws such as the Privacy Act.
The data governance arrangements for CHESS today will continue to apply under the new system;
There will be only limited updates to the data received and how it is managed under the new system;
The operating rules provide the framework for the collection, use and disclosure of data received by CHESS;
The rules specify what data needs to be provided and the purposes for which it is provided;
The rules provide the framework for access to the data received by CHESS, including the parties that can access the data and restrictions on disclosure;
The rules dealing with data and access to data will remain unchanged unless specified in the rule amendment consultation papers (e.g. the rules in relation to the DRP/BSP election functionality); and
Under current CHESS and the new system, security and access controls are designed to ensure that access to data is limited to entitled users performing a function in relation to that information.
CHESS Replacement System Access Pricing
On 29 September 2021, ASX published an information sheet outlining CHESS replacement system access pricing options for clearing and settlement participants, product issuer settlement participants (PISPs), share registries and payment providers.
This paper is consistent with system access pricing previously provided to clearing and settlement participants for CHESS replacement system access pricing in March 2019 and September 2019.
ASX has developed an Assurance Program for CHESS Replacement with the purpose of providing confidence to stakeholders and assist in ensuring the project meets its objectives.
In November 2021 ASIC imposed certain Licence Conditions on ASX Clear and ASX Settlement which included the appointment of an independent expert (IE). ASX – with ASIC's and RBA's consent – engaged EY as the IE to assess ASX's Assurance Program for its implementation of CHESS replacement. The Assurance Program is a critical part of the project that includes independent reviews on key project risk areas.
The objective of this first report is to assess whether the existing design of the Assurance Program is fit for purpose, identifying any topics that require further independent assessment and any remedial actions.