The Australian Government has granted a licence to Chi-X Australia Pty Ltd (Chi-X) under s795B(1) of the Corporations Act as an alternative securities exchange to boost competition in Australia's financial markets.

 

The new market licence, published on the ASIC website, follows in-principle agreement given in March last year, and is subject to Chi-X meeting conditions in relation to resourcing, including the establishment of an adequate compensation fund and testing of its technological infrastructure.

 

Chi-X Australia Pty Ltd is a wholly-owned subsidiary of Chi-X Global, Inc., itself a subsidiary of electronic trading firm Instinet Incorporated, which is in turn a wholly-owned subsidiary of  Japan-based financial services group, Nomura Holdings, Inc. Chi-X Global operates Chi-X Canada, Chi-X Japan, Chi-East (a 50:50 joint venture with the Singapore Exchange) and the Chi-Tech technology services unit.

 

Over the past year, ASIC has developed market integrity rules to enable competition from alternative securities trading platforms. The Government also recently commissioned Australia's financial regulators to consider potential measures to preserve the integrity of the financial infrastructure, particularly clearing and settlement facilities.

 

ASIC will continue to work with market operators and participants during the coming months to ensure a smooth transition to full competition between securities trading platforms.