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The hits just keep coming for Australia’s national bourse operator. As if our embarrassingly paltry gains compared to international peers everywhere from Singapore to Nigeria, the ASX Ltd (ASX:ASX) has now confirmed it will be coughing up more tens of millions than expected in a bid to replace its controversial-because-it’s-old CHESS trading software.
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We’re a long way now from the first time the ASX told Australians it would be overhauling its 1980’s era CHESS market trading software with blockchain, which raised eyebrows at the time, and would continue to if the company hadn’t abandoned those plans a few years ago.
And yet, the CHESS overhaul rolls on. The bourse operator is now opting for a less ambitious replacement program, though it was dragged there kicking and screaming after ASIC took the ASX to court for telling investors the overhaul was coming along well when it wasn’t.
In November CY24, the ASX was telling the market the CHESS replacement would be completed this year (CY26). Tuesday’s announcement puts that into question, given that the ASX itself spoke of historical underinvestment in the very program meant to fix this problem.
The fact that the company spoke on Tuesday of higher costs in FY28 also hints that, maybe, this is still a few years away. Given that the ASX is tied in with the Australian government, perhaps that isn’t too surprising, but surely this is at a point where people really are just going all-in on US equities.
Earlier this month, ASX Ltd got a new CEO – Anthony Attia, a former executive from Euronext – and roughly two weeks later, we’re now got the latest news ASX Ltd will need to spend more than it thought on replacing CHESS.
This has been going on for a good while now, and this finance journalist is tempted to ask where, exactly, the money was going under former management if it wasn’t going towards the projects meant to replace the software. Truly, the mind boggles to think of where.
“[ASX notes] increased FY27 capex guidance of between $180 million and $200M (compared to previous guidance of between $160M and $180M) primarily driven by technology cost inflation and new product development, and FY28 capex guidance of between $170M and $190M,” the company wrote on Tuesday.
“The guidance reflects the investments ASX needs to continue to make as a steward of critical market infrastructure.
“The Final ASIC Inquiry Panel Report identified historical underinvestment compared to global peers, which ASX has committed to address with faster pace and greater ambition.”
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