Australian authorities have been considering how to deal with algorithmic and high-speed trading since 2010. Long story short; the local Australian Financial Review says that the federal Treasury has decided that fees on high frequency trades orders are the way to go.
This prompted protests from the chief of Chi-X Australia, Peter Fowler, that market makers should be treated differently: Read more
Breaking pre-market news on Thursday,
- Dexia confirms Dexia Bank Belgium nationalisation, agrees terms on sale of municipal lending arm — statement. Read more
Australia has awarded an operating license to Chi-X Australia, paving the way for it to become the first foreign-owned stock exchange in the nation’s 150-year trading history, reports Bloomberg. Just weeks after blocking a proposed A$8.3bn ($9bn) takeover by the Singapore Exchange of ASX, the country’s stock exchange, was blocked by Swan on April 8, Treasurer Wayne Swan and financial services minister Bill Shorten said that “competition in Australia’s financial markets is critical to promoting exchange innovation and lowering transaction costs…” Chi-X, which is owned by Instinet, a subsidiary of Japanese bank Nomura, plans to start operations in the fourth quarter.
BATS Global Markets, operator of the third largest stock exchange in the US, was on Thursday night finalising a deal to merge with Chi-X Europe to create the largest platform for share trading in Europe by volume, reports the FT. The deal is being structured as a share swap, and values BATS at $1.2bn and Chi-X Europe at around $360m. BATS will initially pay $300m in cash, with a performance-based earn-out for Chi-X shareholders over some years. The move caps a week of frenetic consolidation among global exchanges, including deals between Deutsche Börse and NYSE Euronext, and the London Stock Exchange and Canada’s TMX Group. The WSJ notes that while Chi-X and BATS are much smaller than the largest exchanges, they have gained business by offering fast and cheap trading venues..
BATS Global Markets, operator of the third largest stock exchange in the US, was on Thursday night finalising a deal to merge with Chi-X Europe to create the largest platform for share trading in Europe by volume, two people familiar with the deal said, reports the FT. The move caps a week of frenetic consolidation among global exchanges, with Deutsche Börse and NYSE Euronext revealing details of a plan to build the world’s largest bourse, and the London Stock Exchange tying up with Canada’s TMX Group.
The bid by Singapore Exchange for ASX, operator of Australia’s main bourse, has gained the green light from Australia’s competition regulator, reports Bloomberg. The deal would not adversely affect competition in exchange services, Australia’s ACCC competition watchdog said on Wednesday, after examining whether the acquisition of ASX would deter entry into the Australian market of rival exchange, Chi-X Australia and other competitors due to SGX’s links with Chi-X Global. The deal still needs clearance from Australia’s foreign investment and securities regulators as well as the central bank; also, some law-makers have raised national-interest concerns.
Shares in SGX, the Singapore exchange, fell nearly 7 per cent after it unveiled an agreed US$8.2bn offer for Australia’s ASX – a deal that would create Asia’s second-largest exchange group, and the fifth largest in the world, reports the FT. ASX shares rose by as much as 25 per cent to A$43.89 on details of SGX’s bid, which values the Australian exchange at A$48 a share. Both bourses have struggled to compete with the rise of alternative platforms and new technology for trading. In particular, the combined SGX-ASX entity will be able to tackle the Australian arrival of electronic trading platform Chi-X in March 2011, and vie with Hong Kong as a global centre for initial public offerings, Bloomberg observes.
The new head of Chi-X Global has called a halt to the rapid expansion of the start-up trading platform into Asia, the FT reports. Tal Cohen, who became chief executive in early September, said the group would evaluate the Korean market, in contrast to his predecessor John Lowrey’s vision of further moves into new markets in the region. “It’s not so much our opinion of the market has changed … but how we execute. We’re a start-up with limited resources,” said Mr Cohen. “Asia is a tremendous opportunity for us and a place we think we can add value,” he said. “There will be some changes about how we approach it,” describing Chi-X Global as needing to finding a balance “between harvesting the opportunities and doing it in a manner the start-up can digest.”
Chi-X Europe, the pan-European share trading platform, has announced it has received an approach that could lead to an offer being made for the company, the FT reports. While it said the “enquiry” from an unnamed third party “may not lead to an offer for the whole or partial sale of the company,” Nasdaq OMX has been named among interested bidders in the past. With the number of trades handled by Chi-X doubling in the second quarter, the company has aimed to become the top exchange in Europe, Bloomberg says.
Chi-X Europe, the pan-European share trading platform, said on Monday it had received an approach that could lead to an offer, although it added that the “enquiry” from an unnamed third party may not result in the sale of all or part of the company, reports the FT. Recent speculation has focused on Nasdaq OMX or Deutsche Börse as potential buyers, as well specialist buy-out funds or exchanges further afield such as Singapore and Brazil. Such a deal could trigger a shake-up of Europe’s share trading markets.
The London Stock Exchange chalked up a fresh milestone on Tuesday – but probably not one its executives will want to remember.
From Bloomberg: Read more
Chi-X Europe, Europe’s second-largest trading platform by turnover, plans to push for its prices to be included in indices run by its main rivals, the region’s established exchanges, Alasdair Haynes, its new CEO, told the FT. Chi-X believes its platform, launched three years ago, accounts for enough trading in key European shares that it should be used as a component of the main stock indices. Haynes said he would shortly present a three-year plan to the Chi-X board.
Tension between exchanges and banks over the role of “dark pools” in the markets trading looks set to spread to Asia after SGX, the Singapore exchange, criticised the banks’ dark pools as “opaque” systems that prevent investors from seeing prices. Sutat Chew, SGX head of market development, said that politicians should distinguish between broker-led and exchange-led dark pools. He spoke as SGX, in joint venture with Chi-X Global, an operator of alternative share trading systems, prepares to launch Asia’s first exchange-backed dark pool.
Chi-X, Europe’s largest alternative trading platform, will on Wednesday unveil plans for a “dark pool” equities trading facility, in a sign of growing demand from traders for capacity to carry out large orders. Chi-X already offers participants so-called “hidden order types” on its current trading system. Its new dark pool facility, known as “Chi-Delta”, will significantly expand on that when it is launched in the second quarter.
Chi-X, the equities trading platform that has quickly established a foothold in Europe, expects to start operating in Australia early next year and is negotiating to enter several other big Asia-Pacific markets. Tony Mackay, chief executive of Chi-X Global, told the FT he hoped to start operations in Australia in early 2009, subject to regulatory approval. Mackay claimed that, with poor market conditions, Australia’s big pension funds would benefit from the lower trading costs Chi-X could offer. Chi-X, which would be competing head-on with ASX, Australia’s incumbent stock exchange, is in exploratory talks with several Asian governments, including Japan, Hong Kong and Singapore. Nomura, of Japan, is Chi-X’s biggest shareholder. Separately, the FT reports that ASX is under fire from RiskMetrics, an influential corporate governance advisor that has raised concerns over the exchange’s performance as a market supervisor.
Turquoise and Chi-X will not be able to offer trading in Italian equities as planned within weeks due to problems with Borsa Italiana’s settlement system provider, the two European equities trading platforms said Tuesday. The development is a blow to the investment-bank-backed platforms and comes as they prepare to roll out pan-regional trading in competition with Europe’s incumbent exchanges. The delay could prompt questions from Brussels over the smooth implementation of its Mifid securities trading rules, only eight months after they were enacted. The rules were designed to allow each eurozone market to open up to competition from “multilateral trading facilities” such as Turquoise and Chi-X.
New EU rules aimed at liberalising securities trading across the region are generating fierce competition in Europe among exchanges, trading platforms and associated companies for a piece of the action.
In one of the latest developments, the FT reports on Monday, BATS Trading – a multilateral trading facility (MTF) – will pick Savvis, a Nasdaq-listed data networking company, to “host” the equities trading platform it plans to launch in Europe this autumn to take advantage of the new EU rules. Read more