Competition Coming To Australia's Securities Markets
Friday, March 04, 2011

The Australian Securities and Investment Commission has announced its timetable for the introduction of market competition in the country's stock exchange sector.

The decision paves the way for the commencement of operations of Chi-X Australia and signals an end to the Australian Stock Exchange's (ASX) long monopoly over securities trading in the country.

The move gives effect to the government’s policy to support competition between exchange markets in Australia.

ASIC Commissioner, Shane Tregillis, said: "Industry has told us it wants a timetable and an early indication of the regulatory framework in order to plan and allocate resources. The feedback is that at least six months is needed from when ASIC issues its final market integrity rules for competition. The timetable released today reflects this. The timetable also depends on market operators and market participants taking all necessary steps to get ready for competition over the coming period."

ASIC has also released a summary of the intended market integrity rule framework that would apply and the timetable sets out the steps required for Chi-X Australia to become operational, reflecting Chi-X’s plans to have a phased ‘soft launch.’

"We intend to issue the final market integrity rules for competition in April 2011," the Commission stated. "At the same time, we will inform the market of their operative date which will be sometime later in 2011."

ASIC said that the framework takes into account the comments received to a Consultation Paper on Australia's equity market structure and reflects the minimum rules it considers necessary for the introduction of competition in Australia. "We intend to further consult with the aim of settling these additional rules in early 2012 (with sufficient lead time for transition and implementation)."

A subsidiary of electronic trading pioneer Instinet, Chi-X Global is a global provider of trading venues and market infrastructure technologies. The company aims to provide high-speed, low-cost trading alternatives to traditional exchanges and has operations in Canada, Europe and Asia.