The Australian Securities Exchange (ASX) announced in its annual results that its capital expenditure for 2014 was A$43.2 million, maintaining the exchange’s investment in its market infrastructure since 2012. ASX expects capital expenditure in the next financial year to be between A$40 and A$45 million.
ASX’s on-market equity trading share in the last financial year averaged 91%, compared to 95% in the previous year. The value of shares traded per day on the ASX was A$3.3 billion, approximately the same as in 2013. CenterPoint, ASX’s mid-point matching service, produced 16.9% of the firm’s trading revenue, up from 11% in the previous year. Subject to regulatory approval, ASX said it hopes to add international equities in future.
More than half of 2014 capital expenditure (A$25million), relate to ASX’s investment in new post-trade services. ASX reported that its infrastructure investments are on track in OTC derivatives clearing, client clearing and in its collateral management service.
During the year, ASX launched a dealer-to-dealer clearing service for A$ interest rate swaps. That service has to date cleared $124.4 billion in notional value. In July 2014, ASX extended its clearing business to offer client clearing.
ASX said that the next phase in the development of its derivatives markets will be a continued investment in trading, clearing and risk management platforms plus the launch of new products that further integrate exchange-traded futures and OTC derivatives markets.
Derivatives fee changes will take place from 1 October 2014 for the trading electricity futures and interest rate futures and to clear OTC derivatives. Had those fee changes been in place in last financial year, ASX’s revenue would have been reduced by A$ 17 million.
ASX plans to move from a T+3 to a T+2 settlement cycle in early 2016. Its report said the move “will create capital and margin savings for industry, deliver faster settlement of transactions for investors, and allow Australia to meet global best practice”.