National Stock Exchange of Australia to take on ASX with blockchain-based settlement system

National Stock Exchange of Australia to take on ASX with blockchain-based settlement system

The National Stock Exchange of Australia is to go head-to-head with the country's leading securities exchange ASX in a joint venture project to introduce a blockchain-based clearing and settlement system.

The NSXA is teaming with iSignthis to build ClearPay, which will compete directly with the ASX-owned Austraclear facility.

ISignthis has taken a 12.96% initial position in the NSX Ltd and 59% of the new joint venture vehicle, ClearPay Pty Ltd, with the aim of creating "an open, transparent, modern and high-tech focussed alternative to the ASX".

The NSXA will offer digital asset trading in real time, with multi-currency facilities, based upon digital ledger technology (DLT). Fractional trading will become a possibility, as will real time settlements.

The ASX in July will begin testing of its own blockchain-based alternative to legacy settlement service Chess, a major project to achieve same-day settlement using distributed ledger technology from Digital Asset.

ISingthis is proving to be a thorn in the side of ASX, filing a lawsuit in December over the suspension of its shares.

Trading in iSignthis shares was suspended in September, after proxy advisory and research group Ownership Matters raised questions about the company's disclosures and governance. The quality of the firm's customer base has also been under the microscope, with a quarter of its revenue derived from companies subject to regulatory action, a number of whom are facing criminal sanctions for allegedly running illegal trading scams.

In launching the legal case against ASX, the firm says that it has handed over almost 2000 pages of confidential documents dating back over three years.

Chief executive officer John Karantzis says says that its interactions with the ASX raise issues of "procedural fairness and good faith, as well as a substantive question about the actual reason for the suspension".

In a statement on the ClearPay project, the firm says: "ISignthis will be in competition with the ASX across multiple fronts, and we are looking forward to taking up the challenge.

"We believe that by bringing competition to the market, and by providing a truly modern, open and transparent exchange, that we will bring substantial benefits to the Australian public, allow businesses access to fresh equity, whilst providing an alternative for the cash equity market."

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