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Govt backs competition in equities clearing

Govt backs competition in equities clearing

Taylee Lewis
— 1 minute read

Treasurer Scott Morrison yesterday announced a reform package that will see greater competition in the clearing of cash equities as well as more relaxed ASX ownership restrictions.

A statement issued by the Treasury said the Turnbull government is “committed to open and competitive markets”.

“The opening up of competition in the clearing of cash equities is in line with the government's commitment to competition law reform,” the statement said.

The reforms announced by Mr Morrison follow the recommendations of the Council of Financial Regulators’ (CFR) Review of Competition in Clearing Australian Cash Equities.

In addition, the Treasurer also announced a relaxing of ownership restrictions on the ASX.

“The government will amend the ASX ownership restrictions in the Corporations Act to make them consistent with other financial sector companies, like banks and insurance companies. This will allow the ASX more flexibility in raising capital,” the statement said.

ASX executive chairman Rick Holliday-Smith welcomed the changes. Specifically, he said that applying the same 15 per cent ownership to the ASX as other financial institutions puts it on a “level playing field”.

“The Treasurer’s announcement promotes the desirability of well-regulated competition in the Australian marketplace and supports ASX’s efforts to invest in and stimulate innovation,” he said.

The government also recognised the potential benefits of the ASX’s investment in distributed ledger technology (blockchain), a move commended by Mr Holliday-Smith. 

“The government’s decision gives certainty to ASX to continue to assess solutions for the Australian equity market using distributed ledger technology, or blockchain,” Mr Holliday-Smith said.

“This technology has the potential to reduce risk and costs for market participants, speed up the settlement process for investors and support new services for listed companies,” he said.

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Govt backs competition in equities clearing
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