August 8, 2025

(SAY GOODBYE TO THE ASX MONOPOLY)

August 8, 2025

Hello everyone

It’s a challenge that nobody ever expected to see. A rival to the ASX. But it’s welcome. Regulators are close to approving rival operators from overseas.

So, what does that mean for Australian investors and companies?

The corporate watchdog is in the final stages of considering an application from rival market operator Cboe to expand its operations in Australia, including plans for a new full-service exchange for publicly listed companies.

ASIC says Cboe’s entry would “enhance competition and attract foreign investment, providing more choice for investors and greater international alignment.”

The ASX was formed in 1987 after the federal parliament passed legislation amalgamating six independent state-based stock exchanges.

Recently, however, ASX has come under the scrutiny of regulators following a series of failures.

Last year, there was the bungled upgrade of its ageing CHESS clearing and settlement platform, which led to the departure of its then chief executive Dominic Stevens in 2022.

The upgrade was a disaster – there were many delays, and it was ultimately later shelved in favour of an alternative technology provider.

Last December, a critical outage in the CHESS system caused delays to the clearing and settlement of trades, prompting regulatory intervention from the Reserve Bank and ASIC.

To heap a bad event on an already bad situation – last Wednesday, the ASX incorrectly announced that TPG Telecom was acquiring Infomedia, when the actual buyer was TPG Capital Asia.

That error slammed TPG Telecom shares; they plunged 4 per cent, wiping out $410 million in market value, before trading was suspended and later corrected.

Somebody wasn’t paying attention.

These failures have undermined confidence in the ASX’s monopoly over trading infrastructure. It’s not surprising that ASIC has launched an inquiry into the group.

So, who is Cboe?

Cboe Global Markets is a $US26bn ($40 billion) US-listed stock exchange operator.

It was established in 1973 and operates markets across North America, Europe, and Asia-Pacific, offering trading in equities, options, futures, foreign exchange, and digital assets.

CSE (Canadian Securities Exchange) is the other one in the mix.

CSE first publicly traded companies in 2003 and has since gone on to expand its marketplace to more than 800 listed securities and more than 60 dealers.

The CSE plans to create a meaningful alternative to the ASX for early-stage small-cap companies, including explorers, miners, and biotechs, but without the heavy compliance requirements.

This would be a positive development for Australia and for the financial space here in general.

Having more than one full-service stock exchange is not unusual.

In the US, for instance, there’s the New York Stock Exchange, which is the world’s largest exchange, and then there’s the NASDAQ, with its focus on tech companies such as Apple, Amazon, and Meta.

In Canada, there is the Toronto Stock Exchange for large companies, and the TSX Venture Exchange and Canadian Securities Exchange for small-cap and early-stage companies.

It is well known that more competition tends to drive lower prices, and that is what is anticipated if a meaningful alternative to the ASX emerges.

The ASX itself might not be cheering the thought of these changes, as rivals could seriously dent the company’s annual revenue.

Nevertheless, the financial and investment landscape, and the retail investor, stand to benefit from this shift – which, in my opinion, is long overdue.

QI CORNER

Charles-Henry Manchau (Chief Executive Officer at Syz)