To replace its trading, clearing, and settlement system, ASX Ltd., the operator of the Australian stock exchange, announced on Monday that it has teamed up with Tata Consultancy Services (TCS) to develop a product-based solution.

The bourse operator said in a statement, "ASX considers that the chosen product will allow it to provide a reliable, supportable and scalable platform that meets the needs of the Australian market now and into the future."

The operator of the Australian stock exchange announced that it would roll out the new platform in two phases. The initial version will include the clearing service. Additionally, the settlement and sub-register services would be included in the second release.

As stated by ASX CEO Helen Lofthouse, "ASX will maintain our investment in the current CHESS platform to ensure it continues to operate efficiently and reliably until the replacement is implemented." This next part of the project will be a multi-year undertaking.

The Clearing House Electronic Subregister System (CHESS) project is expected to cost between A$105 million ($68.33 million) and A$125 million for its initial release, according to ASX, and will be paid for over a number of years.

The market operator also announced that more stakeholder consultation will begin in the first quarter of 2024, and that the CHESS replacement project will proceed to the next stage of design and implementation.

It is noteworthy that after ASX abandoned a costly overhaul of its CHESS platform last year, Australia has passed regulations to promote competition in post-trade settlement and clearing for financial markets, putting the exchange operator under more scrutiny.

Blockchain technology was supposed to be used by ASX to replace its outdated CHESS software, but the project had to be abandoned in November of last year due to dysfunctional management, issues with the product's scalability and complexity, and trouble recruiting technical support staff.