The Australian Securities Exchange has flagged its ongoing IT modernisation initiatives as a saving grace, helping the exchange meet record-breaking demand amid high levels of market volatility.
Trading activity peaked on Friday 13 March when the ASX’s CHESS core settlements platform recorded 7 million trades, double the pre-COVID peak set in August last year.
“This was a significantly larger volume spike than we had ever seen before, in both absolute numbers and percentage terms, surpassing the tech wreck, GFC, and the European debt crisis,” ASX chief executive Dominic Stevens said during the exchange’s full-year results call.
High volume spikes were recorded across the whole of the ASX’s business during March.
“In fact, eight of the 10 largest intraday ranges in the history of the ASX200 occurred during March 2020,” Stevens said.
“We also saw record daily margin calls - increasing 130 percent from their previous high - as well as a record number of surveillance alerts, doubling of calls to our help desk, a huge increas in market announcements… the list goes on.
“Importantly, over this period of record volume and volatility, ASX produced uptime - or reliability and resilience - of 100 percent across all our key trading and post-trading systems.”
Stevens said the ASX’s resilience during this time showed the exchange had invested in “the right place at the right time,” with customers expecting more than just a “glossy frontend sitting on legacy database infrastructure”.
Chief financial officer Gillian Larkins added that the completion of its new secondary data centre and ongoing CHESS replacement contributing to a capital expenditure of just over $80 million for the 2020 financial year.
On top of the new data centre, the ASX has upgraded the internal network at its Australian Liquidities Centre, and completed a full replacement of its six ASX Net communications networks with a single setup.
“Much of our technology work continues into FY21 and we are expecting capital expenditure to the tune of $90-95 million for this coming year,” Larkins said.
Investment in a new data science and visualisation tool - DataSphere - is set to start generating revenue after the ASX recently began offering the solution to clients.
Other ongoing works include the replacement of the legacy CHESS system with a blockchain-based system - which was pushed to a 2022 completion date due to the coronavirus pandemic and other market pressures - along with a “significant” upgrade of the equity trading system in the next few months, and a replacement of enterprise data warehouses slated for early 2022.
The ASX is also set to switch off its existing website in October this year, to be replaced by a new website already running in parallel.
“We are also upgrading our investor and issuer portals, with issuers now effectively entering all corporate actions digitally via smart forms,” Stevens said.
“ASX is working on enabling that information to be used to allow a comprehensive suite of straight-through-processing services.
“These investments will enable ASX to meet customer demands faster with better solutions.”