By: George Liondis
The Australian Securities Exchange is facing stiffer competition after the federal government gave the green light to an alternative market operator that wants to attract Chinese companies and investors to Australia.
The Asia Pacific Exchange, which is backed by local Chinese businessman George Wang, will be allowed to operate an exchange market in Australia once it meets a number of regulatory conditions, Financial Services Minister Bill Shorten announced on Monday.
“This decision means that the Australian-owned APX market will offer stockmarket listing in Australia for Asian companies, with a particular focus on Chinese companies,” Mr Shorten said. “This will improve access and increase opportunities for Australian investors.”
APX is the latest competitor to emerge as a challenger to the ASX, which had a monopoly in Australia before the government granted a licence to Chi-X in 2011. Chi-X has since captured a 10 per cent share of the market for share trading in Australia.
Another potential competitor, the Financial and Energy Exchange, was awarded a licence by the government last month to offer trading in commodity and environmental derivatives.
APX’s plan is to attract Chinese companies to list on its market in Australia. It also wants to list Australian companies and promote them to Chinese investors, who it is hoped will be able to trade on APX using their own currency.
“APX is aiming to attract corporates, capital and investors from both Australia and Asia, especially China,” Mr Wang said in a statement.
Mr Shorten said APX would have to prove that it had adequate financial and human resources to operate a market and gain an independent verification of the readiness of its technology before it was given the final go-ahead by the government.
