Brokers, traders and custodians in the $2 trillion cash equities market have welcomed the ASX’s decision to upgrade its post-trade settlement and clearing system with blockchain technology and the exchange’s pledge to share cost savings with them. The ASX said it would provide more detail in March about timing for rolling out the new technology being developed by Digital Asset Holdings, a New York start-up run by former JP Morgan investment banker Blythe Masters, of which ASX owns about 8 per cent. The ASX said on Thursday morning it was comfortable replacing its ageing CHESS system with a new one using “distributed ledger technology” (DLT).
The ASX is the first stock exchange in the world to commit to using the technology in a decision that may be followed by other exchanges. It will allow fund managers, stockbrokers and custodians to reduce operating costs because they won’t need to conduct a reconciliation process between their systems and the ASX’s. Instead, they will know in real time that the share ownership information in their systems is the correct version and exactly the same as the ASX’s.
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