The Australian Securities and Investments Commission (ASIC) has registered new capital requirement rules for the imminent arrival of Chi-X Australia, as the regulator puts the final elements in place ahead of the launch of a competitive equity trading environment.
The capital requirements for the alternative trading system, due to launch on 31 October, are closely modelled on similar rules for domestic bourse, the Australian Securities Exchange (ASX), which ASIC says will ensure a level playing field between the two equities markets.
Under the capital rules for Chi-X Australia, market participants must ensure that liquid capital is greater than total risk requirement at all times and that core capital is not less than A$100,000.
Members of both ASX and Chi-X Australia can satisfy the capital rules for both markets with one amount of capital, and need report to ASIC under one set of rules only.
Upon launch, Chi-X Australia will initially offer trading in six stocks: BHP Billiton, CSL, Leighton Holdings, Origin Energy, QBE Insurance and Woolworths. The alternative trading system will use a maker-taker model, charging 0.12 basis points for aggressive orders and 0.06 bps for passive orders.
Outage explained
Meanwhile, the ASX said in a statement that an outage suffered on its market yesterday was not related to the introduction of competition next week, and will not affect its ability to provide clearing, settlement and other services necessary to support the launch of Chi-X Australia.
The outage impacted ASX Trade, the underlying platform that hosts the exchange’s various order books, and lasted from 10.05 until 14.00. ASX confirmed the glitch was due to a network connectivity issue that prevented participants from interacting with the trading platform.
ASX said its technical team worked in conjunction with its technology provider, Nasdaq OMX, to resolve the issue.
“ASX did not meet the high standards that we set for ourselves and that our customers expect,” said Elmer Funke Kupper, the exchange’s chief executive. “ASX has a strong reputation for the quality and reliability of its systems, and this incident gave me a first-hand experience of the way our technical team resolves significant issues.”