The ASX is now actively working on a technology transformation programme that will employ blockchain (distributed ledger) technology to potentially replace its equities settlement systems. In its half-yearly results, the group said it incurred AU$18.7m on capital expenditure during the period ending 31st December 2015, compared to $13m in the previous period. That expenditure was primarily spent on the technology transformation program – which will see a replacement developed for the ASX’s futures and cash market trading platform – as well as the enhanced risk management platform. These are expected to be completed during 2016.
The next phase of the exchange’s technology transformation program will focus on its equity post-trade platforms based on blockchain tech. As part of that plan, the ASX invested in blockchain technology startup Digital Asset Holdings in late January. The New York-based firm, which is led by ex-JPMorgan exec Blythe Masters, seeks to use private or permissioned blockchain technology to streamline financial processes such as syndicated loans.
Digital Asset recently also engaged with JPMorgan on a similar blockchain initiative that aims to make the trading process more efficient and cost effective. The ASX said it has invested $14.9m to acquire a 5% stake in the company and fund an initial phase of development for its blockchain project.