ASX relaxes approach to ownership restrictions

A shake-up of ownership rules means that the Australian Securities Exchange (ASX) can open up to possibilities of an overseas merger. Changes to the system are being rolled out over an 18-month period while a complementary regulatory body is formed to oversee a competitive market in clearing. 

Scott Morrison, Australia's treasurer, says of the decision: "I want to help create an environment where our financial services sector can be both internationally competitive and play a central role in aiding the positive transition of our economy." 

Morrison has indicated that the government will be amending the ownership rules that currently give decision-making power to the Australian parliament over whether a single shareholder can own 15 percent of ASX stock. Power could be given to the treasurer to overrule the 15 percent cap, if the merger or takeover would enable ASX to compete better. 

"This will allow the ASX more flexibility in raising capital" says Morrison. 

Analysts have been weighing in with concerns in regard to near-future overseas deals. Nathan Zaia, Morningstar analyst, states: "This could possibly get more talks with ASX but at the end of the day regulatory approval must still be secured."

Rick Holliday-Smith, ASX Chairman, has supported the decision. He believes that allowing the treasurer to take action in the name of national interest will help ASX become an equal competitor against other financial institutions. 

"These are sensible decisions and in the best interests of Australia's financial markets", he says.

ASX also announced that it would cut clearing fees by 10 percent from July onwards, while emphasising its plans to assess the reality of using blockchain technology for clearing and settlement. 

Chi-X executive John Fildes has previously criticised the high clearing fees of ASX.