The Australian Securities Exchange (ASX) will continue to carry out the clearing and settlement of cash equities, the treasurer, Wayne Swan, announced recently.
Swan said that any licence applications from equities clearing businesses looking to compete in the Australian market would be deferred for two years, following discussions with the Council of Financial Regulators.
"The advice of the council, which I am releasing today, is that while competition would be expected to deliver efficient outcomes, now may not be the appropriate time for changes that will have further cost implications for the industry, given current market conditions and the magnitude of regulatory change already underway," Mr Swan said in a statement.
The announcement comes following the release in June last year of a discussion paper prepared by the Council of Financial Regulators.
The paper, Competition in the Clearing and Settlement of the Australian Cash Equity Market, discussed whether greater competition would represent an increased benefit for the Australian financial market.
Currently, the clearing and settlement of cash equities is operated by the ASX.
While the current structure will remain, the ASX will now be required to develop a code of practice for its cash equities clearing and settlement services to ensure transparency.
The code of practice will be implemented within the next six months and reviewed after two years to assess whether a new entrant should be considered.
"Australia's clearing and settlement infrastructure for cash equities is efficient, well-capitalised and well-regulated," ASX managing director and chief executive Elmer Funke Kupper said.
"ASX will work with industry stakeholders to develop a code of practice for its clearing and settlement services, and is committed to deliver a world class financial infrastructure for Australia."
The ASX recently published a Customer Charter for the first time in its 2012 Annual Report and has said that the new code of practice will be consistent with the principles contained within it.
It added that the investments it is making in its clearing and settlement infrastructure will strengthen Australian's market position globally.
