ASIC moves on ASX monopoly power

In what it says is a move about limiting the Australian Securities Exchange’s (ASX’s) ability to misuse its monopoly power to deter new entrants, the Australian Securities and Investments Commission (ASIC) will require the ASX to publish a comparison of fees against international providers.

The ASIC move is the first exercise of new powers handed to it in May last year via the Competition and Clearing and Settlement services legislation which passed the Parliament in September 2023.

Announcing the ASIC move, chairman Joe Longo said the new rules supported ASIC’s goal of promoting strong and innovative development of the financial system.

‘This is about limiting ASX’s ability to misuse its monopoly power to deter new entrants,’ Mr Longo said.

“The new rules support the long-term confident and informed participation of investors in Australian financial markets by establishing clear obligations to promote competitive outcomes in the provision of clearing and settlement services.

“The clear and benchmarked pricing structure is intended to reduce competitive barriers to entry for entities unaffiliated with the ASX.

“This is a key step in ensuring Australians have a fair, strong and efficient financial system,” Longo said. “More broadly, ASIC is actively looking at the regulatory settings for our markets and will release a discussion paper this week on the subject. These new rules demonstrate our commitment to acting where we see it is necessary.”

“In accordance with these new rules, ASX must ensure its clearing and settlement services are offered in a transparent, non-discriminatory way.

The ASIC announcement said the ASX will have to take all reasonable steps to:

› ensure that the pricing of its services is transparent, fair and reasonable

› provide access to its covered services (including data) on commercial, transparent and non-discriminatory terms, and

› ensure that its core technology systems are designed and developed in a way that facilitates third-party access.