Watchdog nears decision on letting US giant compete with ASX
The corporate watchdog is in the final stages of considering an application from a rival to market operator ASX Limited, which would pave the way for American giant Cboe to conduct sharemarket listings of companies in Australia.
Big investors were updated on the issue by the Australian Securities and Investments Commission (ASIC) chair Joe Longo at an investor roundtable held by Treasurer Jim Chalmers on Wednesday.
ASIC is considering allowing US giant Cboe to conduct listings of companies in Australia.Credit: Getty Images
Cboe Global Markets is a $US26 billion ($40 billion) US-listed stock exchange operator. The company offers trading services in Australia in shares that are already listed on the stock exchange.
However, it is not authorised to conduct new listings of companies (also known as initial public offerings) in Australia.
ASX Limited, which has been embroiled in the fallout from the failure of a big technology project, is effectively the only option for private companies looking to float on the Australian sharemarket.
If ASIC gives the green light to Cboe to conduct new listings in Australia, the government expects this would leave the ASX facing more competition in the market for initial public offerings.
ASIC also told the gathering, which included a range of superannuation heavy-hitters, that it was looking at ways to streamline dual listings of foreign companies.
Treasurer Jim Chalmers said: “Making our markets more competitive will make our economy more prosperous and productive. If it goes ahead, this will mean more investment in Australian businesses, and that means more jobs and opportunities for Australian workers.”
Neither Cboe nor ASX would comment on Wednesday night.
The prospect of more competition for the ASX comes as the market operator faces pressure from regulators after the high-profile failure of a major technology upgrade, known as the CHESS replacement project.
Big investors were left frustrated after the project, announced in 2016, was repeatedly disrupted, before finally being cancelled in 2022.
Treasurer Jim Chalmers said: “Making our markets more competitive will make our economy more prosperous and productive.”Credit: Alex Ellinghausen
ASIC took the ASX to court last year, claiming it had made allegedly misleading statements in relation to the replacement of its clearing and settlement system, the Clearing House Electronic Subregister System (CHESS).
The investor roundtable on Wednesday came as the ASX also made an embarrassing error, when it incorrectly processed an announcement from Infomedia, saying it had been bought by a private equity firm, TPG Capital Asia.
The telco TPG, a different company to the private equity firm, was wrongly cross-referenced in the announcement, sparking a fall in TPG shares before trading was paused. ASX cancelled all trades made in TPG shares between the error and when trading was paused.
“This issue arose from an inadvertent human error and I recognise that it has caused disruption for TPG Telecom and its investors,” said ASX group executive for markets and listings Darren Yip.
“This mistake shouldn’t have happened, and we are reviewing our internal processes to understand if there are additional safeguards or procedures we could implement to reduce the risk of a similar reoccurrence.”
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