Chi-X Global could launch its Australian platform as early as October under a timetable set out by the country's securities regulator, ending the ASX's long-held monopoly.
Last year, after sustained lobbying, the Australian government gave in-principle approval for Chi-X to launch a trading platform in the country. The move was made possible because the Australian Securities and Investments Commission (Asic) has been given responsibly for supervision and enforcement of laws, replacing ASX self-regulation.
Asic has now set out a timetable and a series of steps that need to be taken by market operators and participants ahead of Chi-X's soft launch, pencilled in for later this year.
The watchdog says ASX and Chi-X need to make operating rule and system changes, put in place procedures for simultaneously halting trading, for use of common stock and broker identifiers and for the sharing of certain data, and link to the nominated clock for synchronisation. Chi-X will also need to connect to market participants, Chess, data vendors and Asic.
Meanwhile, participants intending to connect to Chi-X will need to amend their order routing and back office systems and prepare to comply with the new players' operating rules, the new common market integrity rules, and market integrity rules specifically for the Chi-X market. Data vendors will need to connect to Chi-X and make consolidated feeds available to clients.
ASX says it is "ready for market competition", highlighting planned technological improvements set to take place this year, including expanded co-location and connectivity services as well as new trade execution facility designed for high frequency traders.
The bourse is also hoping to get regulatory approval for its tie-up with the Singapore Exchange to help it deal with the new competition, arguing that the introduction of new players such as Chi-X serves to "reinforce the rationale" for its merger.
Australia's financial services minister Bill Shorten says: "Competition is good for the equities market, good for Australian and overseas-based listed companies and good for our financial services sector and employment growth in that sector. By allowing competition we are promoting Australia as a financial services hub and helping ensure our financial markets are efficient and innovative."