Treasurer Scott Morrison today announced a reform package that opens the door to competition in the clearing of cash equities, acting on the recommendations of the Council of Financial Regulators’ (CFR) Review of Competition in Clearing Australian Cash Equities.
The Turnbull Government is absolutely committed to open and competitive markets which are fundamental to a vibrant 21st century economy.
The opening up of competition in the clearing of cash equities is in line with the Government’s commitment to competition law reform.
The Council of Financial Regulators’ Review of Competition in Clearing Australian Cash Equities, which the Treasurer also released today recommended:
- That the Government be open to competition in clearing of equities and implement legislative changes for safe and effective competition.
- That the CFR set out regulatory expectations for ASX conduct while it remains a sole provider, and make legislative changes to allow regulators to enforce the expectations where necessary.
- That the ACCC be given power to arbitrate disputes about access to ASX clearing and settlement services
The Treasurer also announced today a relaxing of ownership restrictions on the ASX, acting upon Recommendation 44 of the Financial System Inquiry.
In response to this recommendation, the Government will amend the ASX ownership restrictions in the Corporations Act to make them consistent with other financial sector companies, like banks and insurance companies. This will allow the ASX more flexibility in raising capital.
The Government also recognises the potential benefits of the ASX’s investment in distributed ledger technology (Blockchain) for the Australian market.
The Government and the CFR agencies will continue to work with the ASX as it progresses this initiative, while identifying any regulatory barriers and ensuring that technological advancements do not preclude competition.
The ASX’s willingness to invest and trial new technologies is strongly supported by the Government, and is consistent with our FinTech agenda.
“As Treasurer I want to help create an environment where our financial services sector can be both internationally competitive and play a central role in aiding the positive transition of our economy,” Treasurer Scott Morrison said.
The CFR Review can be found at http://www.treasury.gov.au/ConsultationsandReviews/Consultations/2015/Review-of-competition-in-clearing-Australian-cash-equities.