A technical glitch at the Australian Securities Exchange (ASX) yesterday, which prevented the proper reporting of trades by alternative venue Chi-X Australia, could help to fuel further debate on market structure in the country.
For a couple of hours yesterday morning, ASX’s Trade Acceptance Service, which manages trade reporting for the entire Australian market, did not accept messages from Chi-X Australia. The problem was apparently resolved just after noon on Tuesday.
“The ASX have admitted the problem was with their interface with Chi-X in reporting the trades to the market,” a spokesperson for Chi-X Australia said.
Despite the issue, some firms, including Bank of America Merrill Lynch, which claims to be one of the largest users of Chi-X Australia, continued to trade.
“While some firms may have stopped trading on Chi-X Australia during the problems yesterday, we remained confident that the issues could be easily resolved and therefore continued trading despite the trade reporting issues,” said Gabriel Butler, head of Asia Pacific electronic trading sales, Bank of America Merrill Lynch.
Chi-X Australia, run by market operator Chi-X Global, launched on 31 October, bringing long-awaited competition to secondary equity trading in the country. During November, Chi-X Australia traded US$757.2 million, or 0.88% of Australian stocks, compared to US$85.1 billion for the ASX, according to figures from Thomson Reuters. On 6 December, Chi-X Australia had a market share of 0.65%.
According to Butler, issues around back-end processes could be the next area of debate between market participants. As well as trade reporting, Chi-X Australia also relies on the ASX for its clearing service.
“While Australia’s market structure has evolved tremendously, there are more discussions ahead, including trade reporting,” added Butler.