Competition Between Exchange Markets in Australia Hots Up as ASIC Releases Intended Market Integrity Rule Framework & Timetable
Canberra, Australia (News4us.com) March 04, 2011
The Gillard Government today welcomed the release of the Australian Securities and Investments Commission’s (ASIC) intended market integrity rule framework and timetable for the Australian exchange market.
Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, said “The framework implements this Government’s commitment to introduce competition between exchange markets in Australia. Evidence from other countries suggests that competition has resulted in innovation and generally lower transaction costs.”
“By setting a timetable, which sets out the steps required for Chi-X Australia to be granted their market licence and begin operations, ASIC is also ensuring market participants have certainty and time to plan and allocate resources to prepare for the new exchange.”
This is a significant change in Australia’s market structure. While competition between financial markets for trade execution services is new to Australia, alternative trading systems have successfully operated in the US, Canada and Europe for a number of years.
This framework is the next step in responding to recommendation 4.5 of the Australia as a Financial Centre: Building on Our Strengths report (Johnson report), which encouraged competitive, efficient and innovative equity markets.
“Competition is good for the equities market, good for Australian and overseas-based listed companies and good for our financial services sector and employment growth in that sector. By allowing competition we are promoting Australia as a financial services hub and helping ensure our financial markets are efficient and innovative.”
Other applications for a market licence will also be considered on their merits, in accordance with the requirements set out in the Corporations Act 2001.
“The Gillard Government will continue to work hard to promote our country as a prime destination for foreign investment and a regional centre of excellence for funds management,” Mr Shorten said.
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