The head of Chi-X Global, the equities trading platform, on Wednesday accused the Australian Securities Exchange of playing the “fear card” after the exchange’s chairman spoke of the dangers of allowing multiple share trading venues.
The development is a sign of frustration over the absence of government approval of licences that would allow rivals to challenge the country’s incumbent exchange.
At the same time, regulatory scrutiny in the US and Europe of certain off-exchange venues has emboldened exchanges such as the ASX to become more vocal in criticising alternative trading platforms.
Tony Mackay, Chi-X Global chairman, hit out at the “extraordinary” comments made by ASX chairman David Gonski, who told shareholders at an annual meeting that Canberra should carefully consider whether to allow new entrants into the country’s markets. He claimed that it was unclear how multiple market operators benefited investors. He said Mr Gonski was playing the “fear card” that competition was bad for Australia.
Chi-X Global, controlled by Nomura of Japan, has been in talks with Canberra for more than a year about securing a market licence to offer equities trading. Its sister company, Chi-X Europe, already operates a pan-European equities platform.
Mr Mackay added: “The … ASX operates a regulated monopoly. It has an average operating margin of about 80 per cent when the average for the companies quoted on its exchange is about 25 per cent.”
He said the average cost of executing a trade in Australia was close to five times higher than in Europe and North America.
“They are fighting to keep their monopoly,” he said, adding that the ASX should discuss with government, regulators and new market entrants Australia’s role as a leading securities market in the region.
Source: FT, 30.09.2009
Filed under: Asia, Australia, Exchanges, News, Services, Trading Technology, ASX Australian Stock Exchange, ATS Alternative Trading Systems, Chi-X, Dark Pools, Exchanges, Regulation
