The Australian Securities Exchange has won government approval to maintain its monopoly on the clearing and settlement of cash equity trades, dashing the ambitions of LCH.Clearnet to invade the territory.
In a statement, Australian deputy prime minister and treasurer Wayne Swan said the government accepted the recommendations of a review board to defer for two years any license application from an equities clearing facility seeking to compete in the Australian market. LCH.Clearnet had lodged an application to open up for business in Australia last year.
"While competition would be expected to deliver efficient outcomes, now may not be the appropriate time for changes that will have further cost implications for the industry, given current market conditions and the magnitude of regulatory change already under way," Swan said.
ASX managing director and CEO, Elmer Funke Kupper, welcomed the ruling: "Australia's clearing and settlement infrastructure for cash equities is efficient, well-capitalised and well-regulated. ASX will work with industry stakeholders to develop a Code of Practice for its clearing and settlement services, and is committed to deliver a world-class financial infrastructure for Australia."
At the start of the year, ASX implemented a new revenue sharing arrangement with clearing and settlement participants. It also proposes to roll out new facilities for the clearing of OTC-traded derivatives and collateral optimisation later this year.