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Asia Pacific Stock Exchange to Adopt Nasdaq OMX Trading Technology - Wall Street Journal

【By ROBB M. STEWART June 11, 2014】MELBOURNE, Australia—Australia's newest stock market aims to roll out a new trading system before the end of the year that will allow it to trade in the Australian dollar and Chinese yuan as it seeks to tap investor appetite for new listings.

Asia Pacific Stock Exchange, or APX, which kicked off in March with the listing of its first two companies, has signed an agreement to adopt Nasdaq OMX's X-stream trading technology, the companies said Thursday.

For Nasdaq, it's part of a push to sell its technology across Asia and strengthen its relationship with other exchanges. APX will benefit from an updated platform more brokers will be able to access and which allows trade in multiple asset classes.

"It's positioning us for growth and our push into the Asian market, particularly China," David Lawrence, chief operating officer of Sydney-based APX, said in an interview.

The exchange aims to offer yuan-denominated trading and derivatives after the new system goes live late in the year and is interested in developing its own index products, Mr. Lawrence said. APX will later also consider currency and commodities trading, he said.

Dietary supplements company Australia Samly Holdings Group and e-commerce firm ZhongHuanYun were the first to list on APX, trading in Australian dollars. Mr. Lawrence said the exchange has a pipeline of Chinese and Australian companies seeking to list over the coming six to 12 months and has applications from stockbrokers to boost the five already connected to the exchange.

APX is targeting Chinese and other Asian companies eager to expand via Australia, as well as Australian companies seeking investors and capital in Asia. The exchange has said it expects many of the companies it will list will be based in China due to waiting lists for the Shanghai and Shenzhen stock exchanges.

China this week reopened its market for initial public offerings, allowing 10 companies to offer their shares to investors. The China Securities Regulatory Commission allowed companies to again float shares in January after a 14-month moratorium on IPOs, but issues stopped abruptly in March.

APX, previously known as Australian Pacific Exchange, has had a stock-exchange license since 2004 but has struggled to get rolling. George Wang's financial services and investment company AIMS Financial Group bought the exchange in 2008 and last year secured regulatory approval to launch.

Nasdaq has already sold its trading, clearing, surveillance and other technology to more than 20 exchanges across the Asian-Pacific region, including to Australia's dominant securities exchange ASX Ltd , the Hong Kong exchange and smaller markets including Malaysia and Bangladesh. It sells two main trading systems, including the X-stream trading technology that was developed in Australia.

"This year we've already signed agreements with a few exchanges and we're optimistic there are more to come this year beyond APX," said Robert Frojd, Nasdaq's regional manager for Asia Pacific.

X-stream, which is most often adopted by smaller exchanges, offers trading in multiple asset classes and indexes. It also offers traders a fast, stable and standardized platform, Mr. Frojd said.

ASX, which since 2011 has faced competition from Nomura-backed exchange Chi-X, has seen a recovery in IPOs and other capital raisings in recent months as companies have been encouraged by a stock market that has been trading near a six-year high. Almost 3.9 billion Australian dollars (US$3.7 billion) was raised in initial offerings on the ASX in May, one of the largest monthly tallies in more than three years.

Source: Wall Street Journal