What is AXE ECN?
NZX Limited (NZX), Citigroup, CommSec, Goldman Sachs JBWere, Macquarie Bank and Merrill Lynch are signatories to a shareholders' agreement, incorporating a company to launch a new Australian ECN (Electronic Communications Network).
ECNs are high-speed, low-cost platforms that separate listing from trading functions and are already available in most leading global markets. The introduction of competition in other jurisdictions has led to improved liquidity, lowered costs and competitive responses from the incumbent exchanges. In recognition of the growing strength and sophistication of the Australian capital markets, the shareholders believe the time is right to introduce a degree of technological and price competition in a subset of exchange services.
Competition gives Australia an opportunity to compete globally and to take a leadership position in the region. Australia will be recognised as a genuine global financial services hub.
There has been overwhelming support for competition in market services from industry in Australia and similarly, ASIC and ACCC made comments in favour of competition in this area.
AXE looks forward to a positive announcement from government on its licence application and is ready to engage on the changes needed to allow competition between operators. It is anticipated that AXE ECN will commence operations in 2009.
What will this mean for Australia?
- Pressure on fees and technological innovation across the board (execution venues, brokers and buy-side firms);
- Tighter spreads with more liquidity (particularly with competition between liquidity providers) – benefits flow to all investors;
- Multiple execution venues create a more resilient Australian marketplace, by reducing the systemic risk by ensuring that there is more than one provider of key market infrastructure in Australia.
For more information please contact:
|
Edwin Budding General Counsel |
Lucinda McFadden Media & Investor Relations |