ASX settlement monopoly faces pricing controls, stricter oversight

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The government is preparing to give the ACCC new powers to arbitrate pricing disputes, and the RBA and ASIC the ability to order ASX to fix governance oversights.

The stock exchange will have new pricing controls imposed on its clearing and settlement of securities trading, with the federal government and regulators set to crack down on its monopoly over proof of share ownership.

The changes were first proposed by the Council of Financial Regulators in 2015 but not implemented by the former Coalition government. The RBA has attempted to hold ASX to strict “financial stability standards” that require the clearing and settlement facilities to have measures in place to manage conflicts between the obligations and interests of the facilities, and the broader ASX group.But at present, the RBA’s enforcement powers are limited to publishing its views on ASX problems. A new directions power would allow it to order the ASX to resolve the issues.

After the Council of Financial Regulators expressed concerns about ASX clearing and settlement in 2015, the Coalition government considered legislation to give ASIC and the RBA rule-making powers and the ACCC arbitration powers. Cboe chairman David Morgan, the former CEO of Westpac,. But it never materialised.

“Our position is in any critical industry, there should be competition and any national infrastructure, if not government owned, should be open to competition,” he said.

 

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