User:Confidence2019/OLES2129/DRAFT

Article title: Chi-X Australia

Associated WikiProjects:

https://en.wikipedia.org/wiki/Template:WikiProject_Organizations

Proposal

It is possible that many investors still unaware that the Australian Securities Exchange (ASX) isn’t the only licenced securities and derivatives market in Australia although many large broking companies such as CommSec have been trading their clients’ investment in Chi-X since its launching in Australia in 2011. As an introduction of competition in equity trading market, Chi-X is not only playing a role of competitor of ASX but also arise needs for ASIC to transform its way of supervision in Australian financial market. One of those notable impacts for the participants in Chi-X is they will not have member rights and remedies that available to ASX market participants as Chi-X is a proprietary limited company and ASX is a listed company.

ASX has legislated monopoly power and has both trading rights and regulation responsibility, which can cause conflict interest and the complexity of financial market structure, system and regulation builds great barrier to its potential competitors. Its monopoly position was challenged by Chi-X.

Chi-X, ‘owned by Japanese investment group Nomura, already operates exchanges in Canada, Japan and a joint venture with the Singapore Exchange in Asia’, managed to apply a licence to operate in Australia financial market and was approved by ASIC at 2011. Its registered company in Australia is called Chi-X Australia. Chi-X Australia’s operation represents Australian corporate regulator approved competition among stock market which could attract more potential competitors and also influence all kinds of players in Australia stock trading markets no matter it is the biggest institution or the smallest retail investor. Influences include reduce trading cost, attract more participants, improve the market infrastructure and capacity, it could also increase the complexity of the regulation to the market and the potential risk to those players.

The article is aimed to display competition in Australian equity trading market, current regulations that apply to Chi-X and some impacts on Australian financial investors.

Titles of Sections

·     Company background and history

·     Competition in Australia equity trading market

·     ASIC and Chi-X

·     Impacts on Australian financial investors

Sources and annotations

Comerton-Forde, C. (2011). Chi-X launch – what does it mean for the Australian market? The Conversation. Retrieved 7th April, 2019, from https://theconversation.com/chi-x-launch-what-does-it-mean-for-the-australian-market-3900

This article published on the same date that Chi-X was granted a license to operate in Australia as a market that provides secondary market trading service. It briefly described Chi-X, competition in equities market and impacts on investors.

UNSW Business School. (2011). Stock Market Competition: Why the ASX needs the X-factor. Business Think. Retrieved 7th April 2019, from https://www.businessthink.unsw.edu.au/Pages/Stock-Market-Competition-Why-the-ASX-Needs-the-X-Factor.aspx

This article gives detailed analysis on prospection of competition in Australian equity trading market as it was published few months prior to approval of Chi-X. It criticised the competition and gives several aspects of possible impacts on the market.

ASIC. (2011). Memorandum of Understanding between Australian Securities and Investments Commission and Chi-X Australia Pty Limited ABN 47 129 584 667. Retrieved 7th April 2019, from https://download.asic.gov.au/media/1311199/ASIC-Chi-X-MOU.pdf

This memo gives details of relationship between ASIC and Chi-X and listed many legislations that apply to Chi-X.

Freeman, G. (2018). Australia’s other exchange driving down trading costs. Morningstar. Retrieved 7th April 2019, from https://www.morningstar.com.au/Stocks/article/australias-other-exchange-driving-down-tradin/166460

This article lists several impacts since the launch of Chi-X to Australian financial investors.