“In my view, there needs to be serious reflection on the part of the senior management and board of directors of the ASX Limited, by regulators, including ASIC and the Council of Financial Regulators, and all stakeholders,” he said.
“The market cannot afford this project to fail. Yet it is difficult to see how an optimal outcome can be achieved when there is such a diverse range of views amongst key stakeholders regarding the status of the project.”
When such well respected stakeholders raise material concerns in relation to a project of such significance, then I consider myself obliged to raise my concerns in the public interest.
— Paul Scarr, Liberal senator
Link told the committee, of which Senator Scarr was a member, that the market is confused about what the blockchain project will deliver and what it will cost for participants to implement. Computershare said ASX had conflicts of interest managing the project and the scope of it “needs to be pared back”.
Senator Scarr said he couldn’t understand why “such material issues are still being raised” by a range of stakeholders given ASX had been consulting on the project since September 2016.
“When such well respected stakeholders raise material concerns in relation to a project of such significance, then I consider myself obliged to raise my concerns in the public interest,” he said. “I do not do this lightly.”
The senator called for “a pathway to be identified which provides confidence to the market” and suggested an independent governance structure and “an urgent review of the current status of the project” by an independent outsider.
“If there are no issues, then an independent expert review will provide confidence to the market,” he said.
“If there are issues, then an independent expert could provide recommendations as to how the project could be progressed to ensure that all material issues are appropriately addressed.
“It is my hope that appropriate action is taken as a matter of urgency to ensure the success of this project which relates to a critical piece of Australia’s financial market infrastructure.”
But an ASX spokesman said as the licensed operator of the clearing and settlement facilities, ASX is responsible for decisions. “The obligations are ours and cannot be outsourced,” he said.
ASX said the issues highlighted by Senator Scarr “have been raised many times by a special interest group” which it had “addressed repeatedly”, and “it’s clear that the views of this special interest group do not represent the views of the vast majority of CHESS users or the broader market”.
ASX said the issues were being raised because Computershare faces technological disruption and competitive threats from the new technology. But ASX said it was open for the incumbent registries to use the new system “to offer better services to their customers”.
