Already a subscriber?FinClear is preparing to break the ASX’s monopoly on crucial clearing and settlement services after the corporate regulator granted the Magellan Financial-backed infrastructure provider the first licences to allow shares in private companies to be traded using blockchain technology.
These will allow its new market, called FCX, to exchange securities for unlisted companies, along with units in managed investment schemes. The market licence will allow FCX to create book builds and liquidity for private company transactions on its secondary market, while the clearing and settlement licence lets it facilitate exchange of security title and manage payments.
ASX botched its attempt to upgrade CHESS with similar blockchain technology, triggering a $250 million write-down in late 2022. It has now embarked on a second rebuild which will not be finalised until 2029. The debacle triggered tougher regulation on ASX, including“The new CHESS capabilities will not be delivered for another four to six years,” Mr Ferrall said.
FinClear built FCX with Digital Asset, the company ASX retained to rebuild CHESS using blockchain before the project collapsed. ASX has turned to India’s Tata Consultancy Services for its second attempt. FinClear’s licence is conditional on it gaining an external consultant to review cybersecurity resilience, which it hopes to have in place by the end of October, with the full market to be operational in November.