CHESS replacement Release 1: Industry Test Approach

By Michelle Huckel, Policy Manager, SIAA

As part of the preparations for the implementation of Release 1 of CHESS replacement ASX has issued a paper setting out its approach to the planned industry test phases and associated industry test environments.

Just to recap, ASX has proposed that the CHESS replacement system will be implemented in two releases. Release 1 will replace the clearing component of CHESS with a subset of the TCS BaNCS MI product and introduce FIX messaging for trade registration for all market operators (ASX, Cboe, SSX and NSX).

This release is designed to minimise disruption for clearing and settlement participants by maintaining the existing CHESS message interface and business processes. ASX will create an internal ASX interface to transfer CHESS External Interface Specifications (EIS) messages from the new clearing service to the current system, for onrouting to clearing participants. This will maintain backwards compatibility for clearing participants. They will be given the opportunity for regression testing to affirm the new system’s complete backwards compatibility.

The aim of Release 1 is to deliver a significant increase in performance through the new clearing service components providing a boost to market volume and scalability within the existing CHESS framework.

ASX is targeting the implementation of Release 1 between mid-March to end-April 2026.

As the primary change in Release 1 is the introduction of the new FIX messaging interface used by market operators, all the initial testing phases involve market operators or their software providers.

Clearing participants will be involved in the Clearing Regression phase and the AMO Parallel Test phase.

Clearing Regression phase

The Clearing Regression phase is a mandatory industry test phase involving clearing participants and market operators where clearing participants will be required to perform internal testing and validation of all downstream EIS messages received that result from trade registration, clearing and netting services. This phase is expected to take place from October 2025 to February 2026.

Clearing participants will only require access to the current CHESS test environment to perform clearing regression tests. They will need to confirm that EIS messages that have been generated by the CHESS replacement system cause no issue in system and business processing for the trade clearing and settlement lifecycle.

Detail on Clearing Regression testing key activities and process is planned to be made available in Q2 2025.

AMO Parallel Test phase

This is a mandatory industry test phase for market operators and provides the opportunity to reconcile a market operator’s production feed of trade registrations to current CHESS against its feed of trade registrations on a To-Be Production infrastructure. This test phase also includes clearing participants and is targeted to take place from November 2025 to February 2026.

This is a critical phase to mitigate cutover risk for Release 1. Its primary goal is to ensure the accuracy and consistency of trade registration feeds between current CHESS and CHESS replacement systems. It will also allow clearing participants to compare and validate EIS messages initiated by the CHESS replacement system.

Attestations

ASX will require clearing participants to attest that they have completed the exit criteria for the Clearing Regression phase and are ready to go-live with CHESS replacement Release 1. An attestation must be signed off by an authorised clearing participant’s representative and provided to ASX after completing Clearing Regression testing.

Next steps

ASX will be holding regular Implementation and Transition working groups to support clearing participants throughout the testing phases in preparation for go-live.

The Industry Test Approach paper can be found here at asx.com.au/markets/clearing-and-settlement-services/stakeholder-engagement/stakeholder-activities.

 

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