FXCM Insights

Australian Securities Exchange

The Australian Securities Exchange (ASX) is the leading exchange group and securities marketplace in Australia. In addition to being the first major global marketplace to be open for business every trading day, the ASX boasts a daily turnover of US$7.2 billion, and a total market capitalisation of US$1.3 billion. In terms of market capitalisation, the ASX ranks globally as the 15th-largest exchange.1)Retrieved 15 April 2015 http://www.marketindex.com.au/history

The ASX provides investors and traders with a vast marketplace offering a wide array of diverse financial products. Equities, indices, debt instruments, ETFs and derivatives are all available for trade. Equities markets on the ASX are substantial in size, and more than 2,200 companies are publicly listed on the exchange, with shares of stock being owned by 6.7 million shareholders. Derivatives markets on the ASX are among the world’s largest, with interest rate derivatives markets being the largest in the Asia-Pacific region.2)Retrieved 14 April 2016 http://www.asx.com.au/about/corporate-overview.htm

A state-of-the-art technology facility, known as the Australian Liquidity Center (ALC), serves as the technology and data headquarters of the ASX. Located in Sydney, the ALC conducts electronic trading operations for both the equities and derivatives markets.3)Retrieved 14 April 2016 http://www.asx.com.au/services/technical-services/australian-liquidity-centre.htm

Market access is made available by the ASX to traders and investors through the use of two different electronic trading platforms. The equities markets are available through the “ASX Trade” platform, and the derivatives markets conduct business on the “ASX Wave24” platform. The ASX conducts all trading operations digitally using cutting-edge connectivity and information systems technology. Extensive hardware and infrastructure geared towards providing traders with the lowest latency possible are located within the ALC.4)Retrieved 15 April 2016 http://www.asx.com.au/services/trading-services.htm

History

Organised securities trading in Australia officially began in 1861 with the creation of the Melbourne stock exchange. Soon thereafter, other major cities took notice of the Melbourne exchange and created their own regional markets. By the turn of the 20th century, exchanges were established in Sydney (1871), Hobart (1882), Brisbane (1884), Adelaide (1887) and Perth (1889). Each of these exchanges traded independently of one another until the creation of the Australian Associated Stock Exchanges (AASE) in 1937, which brought regulation and uniformity to the regional exchanges.5)Retrieved 15 April 2016 http://www.marketindex.com.au/history

The AASE remained the prominent marketplace in Australia until April 1, 1987, when it was replaced by the ASX. Promptly after becoming the premier equities market in Australia, the exchange launched a program called the Stock Exchange Automated Trading System (SEATS). The introduction of SEATS marked the beginning of electronic trading operations in the Australian equity markets.6)Retrieved 15 April 2016 http://www.rba.gov.au/publications/bulletin/2001/dec/pdf/bu-1201-2.pdf By 2000, the majority of trading operations were being conducted digitally.

In 2006, a merger between the Australian Securities Exchange and the Sydney Futures Exchange (SFE) effectively consolidated the two dominant financial markets in Australia. The new entity offered a vast array of financial products to traders and investors, while conducting operations under the name Australian Securities Exchange Limited. Upon completion of the merger, ASX Limited became the ninth-largest exchange group in the world.7)Retrieved 15 April 2016 http://www.asx.com.au/about/history.htm In 2010, ASX Limited formed a subsidiary named the ASX Group, which exclusively managed operations for its parent holding company.

As of the year end 2015, ASX Limited employed 515 workers and generated a positive net income of US$398 million.8)Retrieved 15 April 2016 http://www.tradingeconomics.com/asx:au

It operates as a provider of exchange-based financial market services, and is a publicly traded company in the financial services sector, symbol ASX:ASX. Following the lead of modern-era exchange startups such as the NASDAQ and EuroNext, ASX Limited is listed for trading on its own exchange. ASX’s influence upon the Australian equities markets, in addition to the development of a vast interest rate derivatives marketplace, have made the Australian Securities Exchange a financial pillar of strength in the Asia-Pacific region.

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