Yieldbroker operates licensed electronic markets for trading over 800 Australian and New Zealand debt securities and interest rate derivatives, including government bonds, treasury notes, corporate bonds, floating rate notes, interest rate swaps, overnight index swaps, forward rate agreements and bank bills.
The proposal has the support of both companies’ boards but is subject to satisfactory acceptances by Yieldbroker shareholders and completion of ASX’s final due diligence, which is expected in coming months.
If approved, the investment will be funded from ASX’s existing cash resources and will be broadly earnings-per-share-neutral in the first full year.
ASX chief executive Elmer Funke Kupper said the stake in Yieldbroker will complement the ASX’s exchange-traded derivatives, OTC clearing and collateral management services.
“ASX sees an opportunity for ASX and Yieldbroker to work together to deliver the next generation of Australia’s financial market trading infrastructure,” said Mr Kupper.
“ASX can also provide support for Yieldbroker’s growth ambitions in domestic and international markets.”
Mr Elmer said exchange-traded and OTC derivatives markets are experiencing change globally.
“This proposed investment provides another way that ASX can improve liquidity and develop infrastructure to provide efficiencies to our customers, who access both OTC and exchange-traded products,” he said.
Yieldbroker chair Richard Korhammer said the investment from ASX along with the continued support of the company's existing bank shareholders will help ensure Yieldbroker “remains agile enough to continually offer new and relevant products to its customers both locally and overseas”.
