If Nasdaq has been chosen for CHESS project, ASIC doesn’t know

Mike Taylor

Managing Editor/Publisher, Financial Newswire

28 June 2023

The chair of a Parliamentary Committee has told the Australian Securities and Investments Commission (ASIC) that she has been told that the Australian Securities Exchange (ASX) has already made a key decision on a partner for the CHESS Replacement project and that it has chosen the US-based Nasdaq.

For its part, key members of the ASIC leadership said that if such a decision had been made, then ASIC should have been informed and it had not been.

The chair of the Parliamentary Joint Committee on Corporations and Financial Services, Senator Deborah O’Neill asked the ASIC executives whether they were aware of who the ASX was going to partner with in terms of progressing the CHESS replacement project.

ASX chair, Joe Longo said the regulator was not aware of any decision being made and that, in fact, it was ASIC’s understanding that the ASX “has a way to go” in terms of its options and making a decision about the CHESS replacement platform would look like.

“We don’t expect it to take shape much before the end of the year,” he said but pointed out that there was a lot of differing opinion in the market that needed to be taken into account.

“Well given your closeness to this and the strong statements you have made, would it surprise you if I indicated to you that I have had communications from two independent sources that there has already been a decision about who the technical partner for the ASX moving forward would be,” O’Neill asked.

“Well, that would not be consistent with our understanding of the situation,” Longo said stating that the ASIC team have continuous engagement with the ASX and there has been no notification of a decision having been made.

O’Neill asked whether it was ASIC’s understanding that parties had been engaged but no decision had been made before stating that while she trusted that ASIC’s information was more reliable than hers but that she would put on the record “that a credible source has indicated to me that a decision has already been made and that Nasdaq has been engaged or been advanced in terms of the entity that has been chosen”.

“History will prove whether that was a reliable source of information,” she said and suggested that ASIC investigate “whether that is the case, or not”.