Stiffer competition is expected in Australia's stock market
with the offer by the revitalised National Stock Exchange of
Australia (NSX) to reduce broker application fees to zero. The
new policy took effect on Jan 1, 2012, the same week that the NSX
added 30 firms to its listing.
Emlyn Scott, chief executive officer of the NSX, said by
bringing down to zero the broker application fee, more Australian
Financial Services Licence holders could become NSX brokers which
would mean more brokers could offer NSX-listed firms to more
investors in the country and overseas.
It is also expected to challenge the listing supremacy of the
Australian Stock Exchange (
) which charges $100,000 application fee, excluding set-up and
other connectivity fees that jacks up the price of enlisting with
The ASX is ranked 12
on the list of the top stock exchanges globally based on market
capitalisation. As of end of 2010, the ASX had $1,454 billion
market capitalisation and handled a trade value of $1,062
Number one of the list is the NYSE Euronext which has a market
capitalisation of $15,970 billion and trade value of $19,813
billion for the same period.
"We are making NSX the best possible place for companies to
list. The significant changes being implemented at NSX will
position us as a listing venue of choice for companies. NSX's
removal of broker application fees means brokers can connect to
NSX more effectively than any other listing market in Australia,"
Ms Scott said in a statement.
With the addition of 30 new companies which migrated from the
Bendigo Stock Exchange that NSX acquired in 2005, the latter is
Australia's second largest listing stock exchange with 120
securities whose combined market capitalisation is more than $2.5
The zero application fee is also expected to boost the number
of NSX current participating brokers at 18 and nominated adviser
firms at 32.
On Oct 31, 2011, the Chi-X Global - backed by Japanese
investment bank Nomura - also started to operate.
At about the same time, the Council of Financial Regulators
proposed for the Australian Securities and Investments Commission
) to be given broader power to impose listing rules on the ASX
and other operators to protect or enhance market integrity.
While ASIC Deputy Chairman Belinda Gibson was open to the
agency being more powers, she was wary of the cost estimated by
market players at $10 million amid pressures from the treasurer
for the office to further cut cost as part of the federal
government's aim to save $2.2 billion across the federal public
Although ASIC took over ASX's supervision of stockbrokers and
investment bank trading, the ASX remains primarily responsible
for enforcement of disclosure rule. However, with the entry of
Chi-X and the growth of NSX, there are questions if the ASX would
place competition ahead of its regulatory