Chi-X Australia has received approval from regulator the Australian Securities and Investments Commission (ASIC) to launch on 31 October, marking a new era of exchange competition in the country.
Chi-X Australia, a subsidiary of trading venue operator Chi-X Global, will commence with a soft launch period for the first six days, having satisfied ASIC’s pre-licence conditions.
The eight stocks available from launch include BHP Billiton, CSL, Leighton Holdings, Origin Energy, QBE Insurance and Woolworths. Upon completion of the soft launch phase, trading will be permitted in all S&P/ASX 200 component securities and exchange-traded funds listed on the Australian Securities Exchange (ASX). Some 22 brokers have confirmed their intention to begin trading on Chi-X Australia at market launch.
Chi-X Australia was finally awarded a licence in principle to operate a market in Australia in March 2010. The official confirmation of Chi-X Australia’s launch ends a three-and-a-half year wait that has been held up by issues including the financial crisis and changes to the supervisory regime that were required for competitors to challenge the ASX.
Chi-X Australia has made no secret of its intent to take market share from the ASX by undercutting the incumbent’s trading fees. The ASX typically charges 0.15 basis points for executing trades, having almost halved its fees last year in preparation for the arrival of competition. Chi-X Australia will charge 0.06 basis points for executing passive orders, but levy a 0.12 bps fee for aggressive orders, i.e. those that match against orders resting on the Chi-X Australia order book.
Trading technology provider Fidessa established connectivity to Chi-X Australia in September. Meanwhile execution management systems provider TradingScreen is to provide a combined picture of stock liquidity of local equities jointly listed on the ASX and Chi-X Australia following the launch.