10.17.2011
By Terry Flanagan

Chi-X Australia Approved by Regs

The upcoming exchange is on target to launch by end of month.

Chi-X Australia has announced that it has received all the necessary regulatory approval from the Australian authorities, and will launch on schedule on Oct. 31.

“We are encouraged by the strong industry support we have received as we’ve prepared for our launch,” said Peter Fowler, chief operating officer of Chi-X Australia in a statement. “The government’s decision to allow competition has already provided benefits, and we expect that these benefits will continue to flow to the investment community once our marketplace is fully operational.”

“We commend the work of the Australian government and regulatory agencies that have worked tirelessly with Chi-X Australia and the industry to achieve this result,” added Tal Cohen, chief executive officer of Chi-X Global.

The Australian Securities & Investments Commission on Oct. 17 gave notice to Chi-X Australia that all preconditions for obtaining the market license have been satisfied, paving the way for the exchange to launch at month’s end.

Extensive testing of systems and procedures has been conducted by Chi-X Australia, market participants and suppliers. An independent consultancy, The Pitt Crew, confirmed in a report provided to ASIC that all of Chi-X Australia’s market participants had attested they were ready, and that all necessary testing was completed.

Chi-X Australia will commence operations on 31 October with a “soft launch,” which will permit trading in eight securities. Upon satisfactory completion of the soft launch phase, trading will be permitted in all S&P/ASX 200 component securities and ASX-listed ETFs.

Chi-X Australia has received applications from a substantial number of brokers seeking to become trading participants, including the 22 that intend to trade at market launch. Chi-X Australia expects to announce further details concerning these applicants in the coming days.

About two months prior to the scheduled launch, the incumbent Australian Securities Exchange made a leadership change, with Elmer Funke Kupper appointed as new chief executive officer, replacing the outgoing Robert Elstone.

ASX chairman David Gonski recently remarked that the introduction of competition in Australia in the form of Chi-X would bring about opportunities for growth for the incumbent. “With the challenges of change come opportunities for ASX to expand its range of products and services, develop new solutions for our customers and alternative revenue streams,” he said.

In anticipation of the new trading platform, the ASX has already lowered trading fees and expanded some of the range and scope of its offerings. It will be also be providing order routing and clearing services for Chi-X.

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