The ASX Ltd (ASX: ASX) share price is in the red. Its tumble comes after the market operator announced that its long-awaited CHESS replacement likely won't be operational until at least 2024.
The company has also commissioned an independent expert to assess the remaining work needed to deliver the software.
The ASX share price is $88.45 at the time of writing, 2.39% lower than its previous close.
Let's take a closer look at the latest delay facing the implementation of updated trade processing software.
New CHESS not expected until late 2024
The ASX share price is slipping today. Its fall comes amid news the company doesn't think its CHESS replacement system will go live until at least late 2024.
ASX and its application provider Digital Asset have found that more development is needed than was previously anticipated to make sure the software meets scalability and resilience requirements.
The company has brought in Accenture to review the work needed to deliver the application. The outcome of the review will be made public.
The expert will also work to help ASX communicate a new timetable for its implementation.
The CHESS system, an acronym for Clearing House Electronic Subregister System, facilitates the transfer of ownership of all ASX shares bought or sold. It also provides an electronic subregister for shares in listed companies.
The ASX began working on the CHESS replacement system in 2015. The company said it would likely miss its anticipated April 2023 implementation in March before confirming the delay in May.
ASX managing director and CEO Helen Lofthouse commented on the news weighing on the company's share price today, saying:
CHESS is a critical system and we must have high confidence in the schedule to deliver new CHESS safely.
[I]t is important that we take time for a careful, independent review of the work done to date and the work still to do.
Existing CHESS remains secure and stable and continues to perform well as we transition to a replacement CHESS system.
Australian Securities & Investments Commission chair Joseph Longo and Reserve Bank of Australia governor Philip Lowe both said the delay is "disappointing". Lowe continued:
The review initiated by ASX is an important step in providing assurance that the new CHESS application software will be fit for purpose. The replacement system must be safe and reliable to maintain investor confidence and the stability of Australia's financial system.
ASX share price snapshot
Despite today's dip, the ASX share price is outperforming this year.
It's fallen just 4% since the start of 2022. That means it has outperformed the S&P/ASX 200 Index (ASX: XJO) by 4.5% in that time.
