NZX winds up Axe ECN

NZX winds up Axe ECN

The New Zealand Exchange (NZX) says it is winding up Axe ECN, conceding its Australian venture cannot "generate sustainable economic returns".

Axe was set up in 2006, with NZX holding a 50% stake in the venture and brokers Citigroup, CommSec, Goldman Sachs, JBWere, Macquarie Bank and Merrill Lynch each taking 10%.

The venture made an initial application for an Australian Markets Licence the following year as it bid to take on the dominant ASX, which has long enjoyed a virtual monopoly.

However, Australian rules blocked the group's way until last year when the government finally made changes to open up the market. Chi-x has since taken advantage, gaining in-principle approval to launch its platform in March.

However, at the time Chris Bowen, minister for financial services, revealed that Axe ECN was not "pressing their application at the moment".

Now, in a brief statement, NZX says: "After a review and careful assessment of the market today, Axe does not see opportunities for its business model to generate sustainable economic returns and shareholders have therefore agreed to cease operations of the legal entity."

The exit of NZX leaves Chi-X as the sole potential challenger to the domestic dominance of the Australian bourse, which is currently reviewing a take-over offer from the Singapore Stock Exchange. Chi-X has yet to launch, as it awaits the results of a public consultation on market structure by the Australian Securities and Investment Commission before entering the fray.

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