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NZX's plans to launch a rival for the Australian Stock Exchange are likely to be delayed until next year because of the looming Australian general election.
The New Zealand Exchange, and five prominent investment banks, have been working for more than a year on AXE ECN, an alternate low-cost trading platform for Australian stocks.
The venture was originally expected to begin operating in the first half of this year, but the launch has been delayed while AXE ECN worked to obtain regulatory clearance.
An initial round of consultation conducted by the Australian Securities and Investment Commission was overwhelmingly supportive of competition in Australia's equities market, with the notable, but unsurprising, exception of current monopoly holder ASX.
AXE ECN chief executive Greg Yanco said yesterday that once a date for the Australian election was announced, which could happen any day now, Treasurer Peter Costello, who will ultimately sign off on AXE ECN's clearance, would be unable to make a decision.
"So it looks like we may have a bit of a delay. I don't think it will be this year, I think realistically we'll looking at the new year," Yanco said.
In its submission to Asic, the Australian Stock Exchange said AXE ECN would decrease the quality and integrity of the Australian securities market. It argued the model proposed by AXE had limited transparency.
An ECN or electronic communications network is a high-speed, low-cost trading platform that enables large investors to report off-market trades between a buyer and seller by the same broker. The trades are known as "crossings", and make about A$18 million for the ASX each year.
