ASX: Just Another Stock Market Operator
By Theresa Hickman on Mar 18, 2010
I try to stay informed with what's happening in global financial markets since we all know they are all interconnected.
Last week, on Mar. 11 2010, Australia's Senate passed a law that reduced Australia's stock market's role to just a stock market operator. Before this, ASX (Australian Stock Exchange) acted as both its own regulator and operator (supervising trade actvities and handling the trades) of Australia's stock market. Many viewed this as a conflict of interest.
So now, the Australian Securities & Investments Commision (ASIC) will act as regulator and ASX will simply be a stock market operator to ensure the continued integrity of financial markets.
I believe what this is doing is laying the groundwork to have more than one stock exchange in Australia. I woudn't be surpised if Nasdaq makes a play. As you may or may not know, Nasdaq had been trying for years to take over control of the London Stock Exchange (LSE), which LSE had rejected because it thinks it is worth more than what Nasdaq is willing to pay. Nasdaq or even NYSE may want a piece of Asia/Pacific because nowadays most of the IPOs are coming from foreign companies outside the US.
I didn't know this, but apparently many Asia/Pacific stock exchanges have a monopoly where they act as both regulator and operator.
I'll be curious to see what happens after the ASIC meet and decide how to regulate Australia's stock exchange to see how many suitors come running towards Australia's financial market.