- National Stock Exchange of Australia (NSXA), has finally launched its Trade Acceptance Service (TAS), initially with ten brokers.
- The mirrored transactional data via TAS will be written to both CHESS and DESS
- DESS is a new Distributed Ledger Technology (DLT) based system, introduced to compete the age-old CHESS.
- Currently, the company is seeking approval and government cooperation to allow post-trade market participants to choose voluntarily between the two systems.
On 24th November 2020, NSX Limited (ASX: NSX) came out with the much-awaited announcement from the last couple of months. National Stock Exchange of Australia (NSXA), a wholly owned subsidiary of NSX, has finally completed its Trade Acceptance Service (TAS) integration to the ASX Clear system and has gone live with it.
In the initial stage, only 10 NSXA brokers connected to the system; namely.
- Bell Potter Securities Limited
- Burrell Stockbroking Pty Ltd
- Canaccord Genuity Financial Limited
- E. L. & C. Baillieu Limited
- FinClear Execution Ltd
- Morgans Financial Limited
- Morrison Securities Pty Limited
- Openmarkets Australia Limited
- State One Stockbroking
- Taylor Collison Limited
The transactional data will also be mirrored directly to both CHESS and the Company’s Digital Exchange Subregister System (DESS). The DESS is a Distributed Ledger Technology (DLT) based system built by iSignthis Ltd.’s subsidiary, Probanx Solutions Ltd.
The is being managed by ClearPay Pty Ltd which also intends to apply for the clearing and settlement license in the next year.
DESS is intended to take on CHESS
The main objective of introducing this new platform is to provide an alternative to the age-old CHESS platform. However, during the initial stages, DESS will run in parallel to CHESS and will be restricted to the internal use by NSXA until the full regulatory requirements are being met.
Currently, the company is seeking approval and government cooperation to allow post-trade market participants to choose voluntarily between the two systems via the company’s proposed “structural separation” of CHESS and ASX Clear functions. This structural separation is almost identical to the Target2 Securities regime being used for settlement in EU.
After these approvals, NSXA would be able to bring a healthy competition with ClearPay in the clearing and settlement services in Australia.
Key management statements
John Karantzis, Managing Director of NSXL, stated the need for a reliable market infrastructure backed by improved technology. Also, a stable and competitive alternate should be available that works best in the interest of the country.
NSXA with ClearPay is moving in the direction to provide a robust alternative infrastructure and aims to deliver a highly scalable technology, free from the encumbrances of legacy systems. However, changing the landscape is not a one-man show, and regulatory approvals with commitment from the government would be required.
The NSX share price took a massive hit in today’s session. The stock was down by 9.09% and is trading at A$0.35 (as at 2:22 PM AEDT). However, the news was probably discounted in the share price well before today’s announcement as the stock rallied by an unexpected 83.3% in the last two sessions only.
The stock has already delivered a three-digit YTD return of 100%.