It's not about CHESS - Part 1 | Criticism directed towards the ASX about CHESS replacement
https://finclear.com.au/
In this special series 'It's not about CHESS', FinClear CEO David Ferrall gives his insights on Australia’s unique market microstructure that will enable rapid uptake of digitised securities, which is a direct result of ASX’s decision almost 30 years ago to promote direct ownership of listed securities via the Holder Identification Number (HIN).
Australia’s unique market microstructure – that will enable rapid uptake of digitised securities – is a direct result of ASX’s decision almost 30 years ago to promote direct ownership of listed securities via the Holder Identification Number (HIN).
Secondly, the real prize in shifting to distributed ledger technology (DLT) is the shift away from custody, representing a huge step change in the way we invest and delivering massive benefits to end investors.
And thirdly, the most vocal critics are those that will lose the most – what we call the ‘wagon wheel’ of service providers sitting around financial markets adding layers of fees.
HIN was a very early herald of direct individual investment capability. The current blockchain and crypto craze is an interesting period in our history but it is masking the real prize – shifting assets away from custody and into directly held tokens sitting on the DLT.
Today, ASX has around USD $2 trillion of assets on HIN. But this is not the norm. Zoom out, and you’ll find USD $250-300 trillion of securities held in custodial solutions around the world in markets where there is no HIN capability. When the DLT revolution comes – and it is coming – the savings and benefits to end investors from moving out of custody will be truly mind boggling.