Chi-X gets green light for Australian platform; LSE bemoans MTF's regulatory advantage

Chi-X gets green light for Australian platform; LSE bemoans MTF's regulatory advantage

Australia's government has given in-principle approval for Chi-X to launch a trading platform in the country, finally busting the monopoly long enjoyed by the ASX.

The decision comes after two years of lobbying from Chi-X and saw shares in the ASX slide three per cent.

The move has been made possible because, from the third quarter, the Australian Securities and Investments Commission (ASIC) takes on responsibly for both supervision and enforcement of laws, replacing ASX self-regulation.

Chris Bowen, minister for financial services, says: "The Government's announcement of support for competition between financial markets operating in Australia is an important step in ensuring that Australia's financial markets are innovative and efficient, now and into the future."

Bowen says the introduction of competition in the market will have implications for price discovery, compliance and best execution, with participants requiring a lead time to adapt to the new environment.

Chi-X could be joined by Liquidnet and Axe ECN, both of which have applications for licences in, although Bowen told reporters that "my understanding is that neither of those applicants are pressing their application at the moment".

As the Australian market opens up to new entrants, the London Stock Exchange's CEO Xavier Rolet has bemoaned the introduction of a rash of new platforms in Europe, complaining of an "uneven playing field" when it comes to regulation of bourses and new players like Chi-X.

He told the Reuters Exchanges and Trading Summit, that the LSE employs 150 compliance staff and pays European regulators around EUR5 million a year in fees while Chi-X has between three and five compliance staff and pays just EUR140,000.

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