CANBERRA: Australia's government has granted final approval for Chi-X, owned by Nomura , to begin operating an alternative securities exchange in Australia, ending the two-decade monopoly of ASX Group Ltd .
Assistant Treasurer Bill Shorten said the market regulator, the Australian Securities and Investments Commission (ASIC), would work with market operators to ensure a smooth transition to competition.
"The new market licence will be granted subject to Chi-X meeting strict conditions in relation to resourcing, including the establishment of an adequate compensation fund and robust testing of its technological infrastructure," Shorten said in a statement.
ASIC laid down an indicative timetable for new market integrity rules in early March, which is expected to see Chi-X launch near the end of 2011.
Competition from electronic trading platforms like Chi-X has spurred a string of exchange mergers around the world, including Deutsche Boerse's bid for NYSE Euro Next, London Stock Exchange's bid for Toronto Stock Exchange parent TMX Group Inc and Singapore Exchange's failed $7.7 billion bid for ASX.
The government blocked the bid, saying it was not in the national interest, a move seen limiting the options of the bourse at a time when major competitors are consolidating.
ASX has previously said that it was ready to face the introduction of competition, and the end of its monopoly has reinforced the rationale behind its tie-up with SGX.
Chi-X, a wholly-owned subsidiary of Chi-X Global Inc, got an in-principle market licence in Australia more than 12 months ago, and had targeted a launch date about October 2010 but was delayed by a handover of powers to the regulator and a general election.
Chi-X is expected to target the execution of large wholesale trades, which account for about a third of all trade, rather than company listings.
Analysts say it may struggle to make large inroads into ASX's dominance given the amount of time ASX has had to develop new products and pricing. ' Reuters
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Assistant Treasurer Bill Shorten said the market regulator, the Australian Securities and Investments Commission (ASIC), would work with market operators to ensure a smooth transition to competition.
"The new market licence will be granted subject to Chi-X meeting strict conditions in relation to resourcing, including the establishment of an adequate compensation fund and robust testing of its technological infrastructure," Shorten said in a statement.
ASIC laid down an indicative timetable for new market integrity rules in early March, which is expected to see Chi-X launch near the end of 2011.
Competition from electronic trading platforms like Chi-X has spurred a string of exchange mergers around the world, including Deutsche Boerse's bid for NYSE Euro Next, London Stock Exchange's bid for Toronto Stock Exchange parent TMX Group Inc and Singapore Exchange's failed $7.7 billion bid for ASX.
The government blocked the bid, saying it was not in the national interest, a move seen limiting the options of the bourse at a time when major competitors are consolidating.
ASX has previously said that it was ready to face the introduction of competition, and the end of its monopoly has reinforced the rationale behind its tie-up with SGX.
Chi-X, a wholly-owned subsidiary of Chi-X Global Inc, got an in-principle market licence in Australia more than 12 months ago, and had targeted a launch date about October 2010 but was delayed by a handover of powers to the regulator and a general election.
Chi-X is expected to target the execution of large wholesale trades, which account for about a third of all trade, rather than company listings.
Analysts say it may struggle to make large inroads into ASX's dominance given the amount of time ASX has had to develop new products and pricing. ' Reuters
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