'Good news for the economy': Rival Australian stock exchange gets green light
The financial regulator has given the green light for a major rival to Australia's stock exchange to start listing new companies on its market, piling further pressure on the ASX.
The Australian Securities and Investments Commission (ASIC) this morning announced it has approved Cboe Australia's listing market application, allowing it to list companies for investors to trade on its platform.
"Australia's capital markets are strong and resilient, but they must continue to adapt to evolving global market dynamics and meet the future needs of our economy," ASIC chair Joe Longo said.
EXPLAINED: How a $400 million stuff-up is only one of the stock exchange's problems
Cboe Australia has been approved to list new companies on its exchange. AFR/Louie Douvis
"This move will provide more choice for companies to list in Australia, build more links to offshore markets and create more options for investors, which is good news for the Australian economy."
The move paves the way for Cboe to list new companies on its platform in direct competition with the Australian Securities Exchange (ASX), which is already facing heavy scrutiny from regulators and frustration from investors and shareholders.
In August, the ASX made an embarrassing and costly blunder when it mixed up telco TPG with a global asset manager of a similar name, temporarily wiping $400 million off the Australian company's value.
While the ASX reversed all the trades, TPG's share price still hasn't recovered to what it was before the error.
READ MORE: Australia facing skyrocketing insurance costs caused by extreme weather
ASIC chair Joe Longo said the approval was good news for the Australian economy. Peter Rae
The Reserve Bank and ASIC were already investigating the ASX then over what Longo said were "repeated and serious failures", including market outages and a bungled attempt to upgrade its aging settlement system.
ASIC also launched legal action against the ASX last year over what it alleges were deceptive and misleading statements about the settlements system replacement project.
Following this morning's announcement by ASIX, ASX's share price dropped by almost 2 per cent as of 11.30am (AEDT).
Cboe already hosts around one-fifth of Australia's equity market turnover on its exchange, the equivalent of around $2 billion in trades every day.
It is now the fourth market operator approved to list securities in Australia, alongside the ASX, National Stock Exchange of Australia, and Sydney Stock Exchange.
DOWNLOAD THE 9NEWS APP: Stay across all the latest in breaking news, sport, politics and the weather via our news app and get notifications sent straight to your smartphone. Available on the Apple App Store and Google Play.
Share a tip-off, video or photo with us
