ASX clearing monopoly to end

ASX clearing monopoly to end

  • Export:

Australian’s premier stock exchange ASX is set to lose its monopoly on equity clearing and settlement.

Government officials have decided to bring an end to ASX's sole control when it comes to clearing share trades in the country by mid-2017.

It comes after a competition review by Australia’s Council of Financial Regulators, made up of officials from the central bank and securities regulators. 

The move opens up the market to rivals including LCH.Clearnet and Chi-X; the latter has been critical of ASX clearing costs.

A year ago the ASX asked to keep its clearing monopoly for another five years to give it time to invest in new clearing and settlement systems in return for clearing fee cuts.

Its recent move to invest in blockchain technology saw it abandon that condition and it will make a 10% cut in fees from July 2016.

ASX has argued that if it loses its monopoly, it should be allowed to seek additional capital, including mergers, so it can compete on an equal footing with any other competitors that emerge.

Australia's government rejected a proposed $8bn tie-up between the ASX and the Singapore Exchange  in 2011 because of concerns critical market infrastructure, such as clearing and settlement, could end up offshore. 

Removal of ASX ownership restrictions, which limit any one shareholder to 15% of ASX, has now be recommended by the latest competition inquiry.

The restriction will remain, but ASX will have the same conditions as banks where the 15% restriction can be waived by the Treasurer rather than requiring parliamentary approval.

ASX executive chairman Rick Holliday-Smith said it gave certainty to the exchange.

The bourse is still looking for a replacement chief executive after Elmer Funke Kupper quit this month amid an investigation into the company he previously headed, gaming group Tabcorp, over foreign bribery allegations.

  • Export:

Related Articles