The Australian Securities and Investments Commission (ASIC) has approved an application from Cboe Australia to list companies, intensifying competition for the Australian Securities Exchange (ASX). This decision allows Cboe to list new companies on its platform, expanding its current capabilities with exchange-traded funds. Cboe Global Markets, which acquired Chi-X Australia four years ago, has been strategically planning its entry into corporate listings since 2023.
ASIC believes this move will broaden investment opportunities for local investors, providing access to initial public offerings and dual-listed foreign entities. ASIC has been examining the decline in publicly listed companies in Australia alongside the growth of private markets. ASIC Chair Joe Longo stated that Australia’s capital markets must adapt to evolving global dynamics to meet the future needs of the economy.
The ASX’s shares reacted negatively, declining 2.1 per cent to $57.64 following the announcement. The approval coincides with heightened regulatory pressure on the ASX due to a troubled technology upgrade and a settlement outage in late 2024. ASIC has launched an inquiry into the ASX’s operating model and is pursuing legal action related to the botched upgrade of its clearing and settlement platform, CHESS. The initial CHESS upgrade, which incorporated blockchain technology, was abandoned in 2022, leading to substantial write-downs.
Cboe is an alternative exchange operator. Cboe accounts for approximately 20 per cent of the nation’s equity market turnover, managing nearly $2 billion in trades daily. In addition to Cboe’s entry, the ASX faces growing competition for IPOs from the National Stock Exchange of Australia, which is set to be acquired by the Canadian Securities Exchange. Cboe has already engaged with industry stakeholders, including stockbrokers, advisory firms, and investment banks, regarding its plans for listing companies.
