Australian regulation changes pave way for new trading platforms

Australian regulation changes pave way for new trading platforms

The Australian government has handed the country's regulator responsibility for supervising real-time trading on markets, in a move that is expected to end the monopoly currently enjoyed by the ASX.

Currently financial markets self-supervise trading with the ASIC enforcing law against misconduct. This has proved a stumbling block for potential new entrants because it was unclear how they would be regulated given the ASX supervises itself.

However, from the third quarter of 2010, the Australian Securities and Investments Commission (ASIC) will take on responsibly for both supervision and enforcement of laws.

The government says having one supervisor will consolidate the current individual responsibilities, streamlining supervision and enforcement.

"Moving to whole-of-market supervision is also the first step in the process towards considering competition between market operators," says Chris Bowen MP, minister, financial services, superannuation and corporate law.

Chi-x, Liquidnet and Axe ECN are all interested in moving into the Australian market. However, licences will not be granted until ASIC takes over supervision, providing the ASX with at least another year without competition.

Says the exchange in a statement: "ASX notes that the government has foreshadowed that this reform is a necessary step before any further consideration of outstanding market licence applications can take place beyond the third quarter of 2010."

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