At a media event in Sydney on Monday, Chi-X’s newly appointed chief executive Vic Jokovic spoke about the alternative stock exchange’s relationship with Australia’s primary bourse.
“I will say we are both a competitor and a client of the ASX. We interact with the ASX every day,” Mr Jokovic said.
“There's some sense that we butt heads with the ASX a lot.
“Competition is a good thing. It's healthy, but I think we maintain a reasonably collaborative relationship with them, particularly given that they're a key service provider as well, through CHESS and settlements, etc.”
However, Mr Jokovic also laid out Chi-X’s competitive ambitions in the Australian market, pointing to its history of usurping major stock exchanges in other markets.
“You can have a dominant exchange for hundreds of years, but technology and smart technology in this day and age can change things around quickly,” he said.
“[To give] a sense of how quickly that can change the world of exchanges, I think when Chi-X first set up in Europe, they took about 20 per cent of the London stock exchange's volumes in its first year of operations.
“Within three to four years, Chi-X was the largest exchange in Europe.”
Chi-X’s integrated order book, where investors can interact at the mid-point, had already delivered $230 million in savings to retail and institutional investors, Mr Jokovic said.
Chi-X director and head of product and sales Shane Miller said more competition in the market meant investors were “trading on faith that there’s a better price than there is on the ASX”, while acknowledging that it would also “happen the other way around as well”.
“Just having the competition between the two markets means you've got more competition, more participants in the market, and clients getting better execution,” Mr Miller said.
In an accompanying statement, Mr Jokovic said greater competition in the market as well as innovative trading technology was driving costs down for investors.
“Just as the emergence of new entrants helped increase competition in telecommunications (think Optus and Telstra), groceries (ALDI and Woolworths/Coles) and transport services (Uber and taxi services), so too has competition benefited the Australian stock market,” Mr Jokovic said in the statement.