The Australian Securities Exchange (ASX) has delayed the roll-out of its new blockchain infrastructure by about six months following extensive feedback.

The ASX is planning to replace CHESS – the core system performing clearing, settlement and asset registration processes – with distributed ledger technology, commonly known as blockchain.

In response to extensive consultation with the relevant stakeholders, many of whom said the original timeline was too “ambitious”, the ASX has announced that it has pushed back its implementation window from the fourth quarter of 2020 to March or April in 2021.

Many respondents to the consultation questioned if the original timeframe was doable “given the significance of the technology change and the range of new scope being introduced”.

The ASX has also delayed the implementation of seven initiatives for the new infrastructure, included an extra six months for user development and testing and deferred the commencement of industry-wide testing by another six months.

“With these revisions, ASX is confident that a successful market-wide implementation of the CHESS replacement system will now be achieved,” the ASX said in a statement.

“We do not underestimate the challenge to replace CHESS and transition the market to the new system. ASX’s dedicated CHESS replacement project and technical account management teams will support users through this critical industry-wide change program.”

The CHESS system was first launched more than 25 years ago to handle the post-trade functions.

In 2015, the ASX began looking at options to replace the legacy system, and in January the next year selected Digital Asset as its technology partner in developing a prototype for the replacement, based on blockchain technology.

In December last year, the ASX completed its own analysis and assessment of the prototype, and announced that it would be going ahead with it, releasing a consultation paper in April this year.

In response to the 41 written submissions from a range of stakeholders, the ASX said it was confident in the new system but would be delaying its roll-out.

“Overall the submissions were supportive of ASX’s approach to updating Australia’s equity post-trade infrastructure and reflected a strong interest in better understanding the potential benefits that a DLT-based system can offer,” the ASX said.

“There was also broad support for the new features being implemented - although there was a range of views on their relative priorities.”

The move from CHESS to a leading-edge new technology is crucial, the ASX said.

“We look forward to working with the industry to deliver and transition to a state-of-the-art system, which meets the needs of users and ensures that our financial market infrastructure continues to support the development of Australia’s capital markets and economy into the future,” it said.