Blockchain advocates have been awaiting the final decision by ASX Ltd, the Australian Securities Exchange, as to whether ASX will replace its existing and aged CHESS registry, settlement and clearing system with a blockchain-based system that ASX has been developing and testing for the last two years.  Today, ASX announced that it will go ahead with its plan to move to the new blockchain system, as it believes that adopting it will result in significant savings of back-office costs for all involved parties.  At the end of March 2018, ASX reportedly plans to release for market feedback details regarding the launch functionality of the system and the timetable for its implementation, with the final launch date to be determined.

This decision is huge. It is a milestone in the adoption of blockchain generally, and it positions ASX at the forefront of blockchain deployment in the financial services industry.

ASX’s announcement focuses the spotlight on the underlying securities laws, policies and regulations that underpin Australian securities registration, settlement and clearing.  Law is always a lagging indicator of technological development, especially in the case of blockchain, which is so dramatically different than its predecessor technologies.  Thus, the question that Australian lawyers and regulators must be considering right now is:  Will Australia’s existing legal framework support and be compatible with this new technical infrastructure, or are new laws and regulations, as well as revisions and reinterpretations of existing principles, needed?

In the US, similar blockchain infrastructure is being developed for the securities industry, and lawyers in the financial services sector also need to be focused on what changes in regulation are necessary to smooth the transition.

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Photo of Jeffrey Neuburger Jeffrey Neuburger

Jeffrey Neuburger is co-head of Proskauer’s Technology, Media & Telecommunications Group, head of the Firm’s Blockchain Group and a member of the Firm’s Privacy & Cybersecurity Group.

Jeff’s practice focuses on technology, media and intellectual property-related transactions, counseling and dispute resolution. That expertise…

Jeffrey Neuburger is co-head of Proskauer’s Technology, Media & Telecommunications Group, head of the Firm’s Blockchain Group and a member of the Firm’s Privacy & Cybersecurity Group.

Jeff’s practice focuses on technology, media and intellectual property-related transactions, counseling and dispute resolution. That expertise, combined with his professional experience at General Electric and academic experience in computer science, makes him a leader in the field.

As one of the architects of the technology law discipline, Jeff continues to lead on a range of business-critical transactions involving the use of emerging technology and distribution methods. For example, Jeff has become one of the foremost private practice lawyers in the country for the implementation of blockchain-based technology solutions, helping clients in a wide variety of industries capture the business opportunities presented by the rapid evolution of blockchain. He is a member of the New York State Bar Association’s Task Force on Emerging Digital Finance and Currency.

Jeff counsels on a variety of e-commerce, social media and advertising matters; represents many organizations in large infrastructure-related projects, such as outsourcing, technology acquisitions, cloud computing initiatives and related services agreements; advises on the implementation of biometric technology; and represents clients on a wide range of data aggregation, privacy and data security matters. In addition, Jeff assists clients on a wide range of issues related to intellectual property and publishing matters in the context of both technology-based applications and traditional media.