AU Government Push Entry Of Players For ASX Post-Trade Functions

Must Read

A recently published draft of legislation announces that the Australian federal government is opening the door for companies to get involved in the Australian Securities Exchange (ASX) post-trade functions. The government would like to break the monopoly of the ASX by handling its clearing and settlement operations.

The new legislation will allow the Reserve Bank of Australia (RBA) and the Australian Securities and Investments Commission (ASIC) greater authority to oversee the clearing and settlement providers of the ASX as part of their joint responsibility for regulation.

According to Treasurer Jim Chalmers, “RBA and ASIC will be given powers to set rules for the conduct of clearing and settlement service facilities, helping to improve safeguards in our financial markets and stopping existing providers using their market dominance to prevent competition.”

This move by the government responds to the advisory of Australian financial regulators in having greater competition in the industry, effectively following the model of other major financial markets wherein clearing, settlement, and confirmation of the transfer of stock ownership are managed by separate entities to the market operator.

David Ferral, CEO of FinClear Pty Ltd, a trading technology platform, noted, “we encourage anything that encourages innovation. One of the main reasons we haven’t seen competition enter the Australian market is because the ASX and Clearing House Electronic Subregister System (CHESS) capability have been so dominant, and there hasn’t really been enough revenue or a business case for someone to recreate CHESS.”

Chalmers added that the government would like to provide fair, transparent, and non-discriminatory access to emerging competitors to the market infrastructure. The treasurer also noted that this new legislation would provide a competitive financial system to better cater to consumers, businesses, and investors.

In a formal statement, a spokesperson for ASX noted that it welcomes the change and is willing to work with the regulatory bodies to ensure a clear structure in place.

- Advertisement -spot_img
Latest News
- Advertisement -spot_img

More Articles Like This

- Advertisement -spot_img