Australian Securities Exchange
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|Australian Securities Exchange|
|Key People||Elmer Funke Kupper, CEO; Alan Bardwell, CFO; Eric Mayne, CSO market supervision; Maurice Newman, chairman|
|Products||Cash equities and warrants; futures on equity indexes and single stocks, interest rates, wool, grains and electricity; equity and index options; and CFDs|
The Australian Securities Exchange (ASX) is a multi-asset class electronic platform, formed in 2006 by the merger of the Australian Stock Exchange and the Sydney Futures Exchange, combining cash equities with one of Asia’s largest derivatives operations.
The ASX was ranked as the 15th largest derivatives exchange in 2012, according to the Futures Industry Association's annual volume survey of the world's largest exchanges measured by volume. The report states that the amount of futures and options traded on the exchange in 2012 increased by 15.4 percent on 2011's volume figure, to about 259.9 million contracts.
History and Merger
The Australian Stock Exchange announced its agreed cash-and-stock offer for the SFE on March 27, 2006, seven years after an abortive takeover was blocked by domestic antitrust officials and the futures exchange walked away from a rival offer.
The offer of 0.51 stock exchange shares for each SFE share valued the futures exchange at A$2.3bn, and was priced at 31.5 times 2006 earnings and a 25 percent to its average level over the previous 30 days. The transaction closed on July 26, 2006, and the new ASX was officially formed in December 2006.
The legacy exchanges have a track record for innovation, and were among the first to demutualize, list their shares and switch to all-electronic trading, which ASX now offers on a 24-hour basis. The new exchange is a leader in the fast-growing markets for contracts-for-differences (CFDs). Futures and options volumes for the new exchange rose 16 percent to 92.7m contracts in 2007, while cash market business rose 44 percent to A$1,600bn.
In 1998, the ASX became the first large exchange to demutualize and list its shares, while the SFE demutualized in September 2000 and listed on the ASX in April 2002. The stock exchange traces its roots back to the creation of the Sydney Stock Exchange in 1871, which was combined in 1937 with a number of regional bourses to form the the Australian Associated Stock Exchanges. The SFE was started in 1960 as the Sydney Greasy Wool Futures Exchange, changing its name to the SFE in 1960.
Structure and Regulation
The legacy SFE ranked as the world’s 13th-largest futures exchange by contract volume in 2006, while the stock exchange operator also operated a smaller derivatives platform and listed 2,090 companies with a combined value of A$1,630bn as of June 30, 2007.
ASX Ltd reported a 45.6 percent rise in net profits to A$313.1m in the 12 months to June 30, 2007, its first full year of operation, with operating revenues rising 22.7 per cent to A$552.7m. The cash market remains the largest source of revenues, accounting for 30 percent in fiscal 2007, with listings adding a further 21 percent. The derivatives complex accounted for 28 percent of total revenue. Information services contributed 11 percent of revenues.
In April of 2009, ASX introduced a Corporate New Trader Incentive Program, which allows eligible firms or corporations to trade ASX’s benchmark products free of ASX’s standard exchange fee for a six month period. ASX provides a full rebate of the exchange fee per side to approved new firms or corporations who trade more than 1,000 contracts per month in any ASX benchmark product for the period of the Incentive Program.
The SFE complex spans futures and options in equity, interest rate, agricultural and energy products, with volumes rising from 72.4m to 82.8m in fiscal 2007. The average fee per contract dipped from A$1.45 to A$1.39. Volumes in the smaller legacy ASX complex of futures and options dipped from 23.1m to 22.9m.
Australian Treasury futures dominate the SFE complex, which has been expanded to include a New Zealand government bond contract. The SFE SPI 200 equity-index is the fourth most heavily-traded contract. Agricultural futures include wool and live cattle.
The ASX also offers wool futures and options in an agricultural complex which includes wheat, barley, canola and sorghum. Financial products include futures on the benchmark S&P ASX 50 and 200 indexes.
|Year||Total Annual Volume||Percent Change||World Ranking|
|ASX 24||102,359,163||(-) 0.1%|
|ASX Group||259,966,030||(+) 15.4%|
On November 19, 2009 amid soaring temperatures, the Australian Securities Exchange's d-cypha ASX Australian Electricity Futures and Options market set a new record for daily volume with 4,509 contracts, smashing the old mark of 3,021 set exactly one year earlier. The total face value of contracts traded on November 19, 2009 was AUS$440 million and they represented more than 10 times the daily physical demand for electricity in Australia under the country's National Electricity Market. Overall liquidity in the contracts has increased from 152 percent of underlying physical demand in 2008 to 172 percent in the first 11 months of 2009.
On June 8, 2010, ASX announced that they had deplopoyed a new hosting solution with Equinix in Chicago to offer their US-based clients direct access to the Sydney Futures Exchange and it's suite of products.
In late October 2010, it was announced that the Singapore Exchange and the Australian Securities Exchange had entered into a merger agreement creating Asia's second largest Exchange group behind Hong Kong Exchange and Clearing. It was noted that the Singapore Exchange offered the equivalent of US$8.2 billion for the Australian Exchange. 
- ↑ 2010 Annual Volume Survey. Futures Industry.org.
- ↑ 2010 Annual Report & Statistics. World Federation of Exchanges.
- ↑ Members. World Federation of Exchanges.
- ↑ Merger Agreement. ASX.
- ↑ Press Release. ASX.
- ↑ Press release. ASX.
- ↑ Official History. ASX.
- ↑ Annual Report 2007. ASX.
- ↑ Volume Growth Accelerates. FIA.
- ↑ Press Release. ASX.
- ↑ New Trader Incentive Program. ASX.
- ↑ Annual Report 2007. ASX.
- ↑ d-cypha ASX Australian Electricity Futures And Options Market: Record Daily Volumes Of 4,509 Contracts Registered On 19 November 2009. Mondovisione.com.
- ↑ Australian Securities Exchange Launches New Hosting Solution, Offering US-Based Clients Direct Access to Its Futures Market Via Equinix. BusinessWeek.
- ↑ SGX-ASX talk merger; to be 5th largest exchange group. Commodity Online.