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Australian Securities Exchange

Australian Securities Exchange Ltd (ASX) is an Australian public company that operates Australia's primary securities exchange, the Australian Securities Exchange (sometimes referred to outside of Australia as, or confused within Australia as, The Sydney Stock Exchange, a separate entity). The ASX was formed on 1 April 1987, through incorporation under legislation of the Australian Parliament as an amalgamation of the six state securities exchanges, and merged with the Sydney Futures Exchange in 2006.

"ASX" redirects here. For other uses, see ASX (disambiguation).

Type

Sydney, Australia

1987 (1987)

ASX Limited
ASXASX

Helen Lofthouse,[1] CEO

2,187 (January 2024)[2]

A$2.6 trillion (January 2024)[2]

Today, ASX has an average daily turnover of A$4.685 billion and a market capitalisation of around A$1.6 trillion, making it one of the world's top 20 listed exchange groups, and the largest in the southern hemisphere.


ASX Clear is the clearing house for all shares, structured products, warrants and ASX Equity Derivatives.

Financial development – Australia was ranked 5th out of 57 of the world's leading financial systems and capital markets by the World Economic Forum;

Equity market – the 8th largest in the world (based on free-float market capitalisation) and the 2nd largest in Asia-Pacific, with A$1.2 trillion market capitalisation and average daily secondary trading of over A$5 billion a day;

Bond market – 3rd largest debt market in the Asia Pacific;

Derivatives market – largest fixed income derivatives in the Asia-Pacific region;

– the Australian foreign exchange market is the 7th largest in the world in terms of global turnover, while the Australian dollar is the 5th most traded currency and the AUD/USD the 4th most traded currency pair;

Foreign exchange market

Funds management – Due in large part to its compulsory superannuation system, Australia has the largest pool of funds under management in the Asia-Pacific region, and the 4th largest in the world. Its primary markets are the .

AQUA Markets

ASX Group[3] is a market operator, clearing house and payments system facilitator. It also oversees compliance with its operating rules, promotes standards of corporate governance among Australia's listed companies and helps to educate retail investors.


The Australian Securities & Investments Commission (ASIC) has responsibility for the supervision of real-time trading on Australia's domestic licensed financial markets and the supervision of the conduct by participants (including the relationship between participants and their clients) on those markets. ASIC also supervises ASX's own compliance as a public company with ASX Listing Rules.


ASX Compliance is an ASX subsidiary company that is responsible for monitoring and enforcing ASX-listed companies' compliance with the ASX operating rules.


The Reserve Bank of Australia (RBA) has oversight of the ASX's clearing and settlement facilities for financial system stability.


Products and services available for trading on ASX include shares, futures, exchange traded options, warrants, contracts for difference, exchange-traded funds, real estate investment trusts, listed investment companies and interest rate securities.[4]


The biggest stocks traded on the ASX, in terms of market capitalisation, include BHP, Commonwealth Bank, Westpac, Telstra, Rio Tinto, National Australia Bank and Australia & New Zealand Banking Group.


The major market index is the S&P/ASX 200, an index made up of the top 200 shares in the ASX. This supplanted the previously significant All Ordinaries index, which still runs parallel to the S&P ASX 200. Both are commonly quoted together. Other indices for the bigger stocks are the S&P/ASX 100 and S&P/ASX 50.

Clearing House Electronic Sub-register System (CHESS). The investor's controlling participant (normally a broker) sponsors the client into CHESS. The security holder is given a "holder identification number" (HIN) and monthly statements are sent to the security holder from the CHESS system when there is a movement in their holding that month.

Issuer-sponsored. The company's share register administers the security holder's holding and issues the investor with a security-holder reference number (SRN) which may be quoted when selling.

Security holders hold shares in one of two forms, both of which operate as uncertificated holdings, rather than through the issue of physical share certificates:


Holdings may be moved from issuer-sponsored to CHESS or between different brokers by electronic message initiated by the controlling participant.

ASX trading participants (brokers) must report all daily gross short sales to ASX. The report will aggregate the gross short sales as reported by each trading participant at an individual stock level.

ASX publishes aggregate gross short sales to ASX participants and the general public.

[13]

Short selling of shares is permitted on the ASX, but only among designated stocks and with certain conditions:


Many brokers do not offer short selling to small private investors. LEPOs can serve as an equivalent, while contracts for difference (CFDs) offered by third-party providers are another alternative.


In September 2008, ASIC suspended nearly all forms of short selling due to concerns about market stability in the ongoing global financial crisis.[14][15] The ban on covered short selling was lifted in May 2009.[16]


Also, in the biggest change for ASX in 15 years, ASTC Settlement Rule 10.11.12 was introduced, which requires the broker to provide stocks when settlement is due, otherwise the broker must buy the stock on the market to cover the shortfall. The rule requires that if a Failed Settlement Shortfall exists on the second business day after the day on which the Rescheduled Batch Instruction was originally scheduled for settlement (that is, generally on T+5), the delivering settlement participant must either:

Make a market continuously, on a set of 18 options.

Make a market in response to a quote request, in any option up to 9 months out.

Options on leading shares are traded on the ASX, with standardised sets of strike prices and expiry dates. Liquidity is provided by market makers who are required to provide quotes. Each market maker is assigned two or more stocks. A stock can have more than one market maker, and they compete with one another. A market maker may choose one or both of:


In both cases there is a minimum quantity (5 or 10 contracts depending on the shares) and a maximum spread permitted.


Due to the higher risks in options, brokers must check clients' suitability before allowing them to trade options. Clients may both take (i.e. buy) and write (i.e. sell) options. For written positions, the client must put up margin.

Interest rate market[edit]

The ASX interest rate market is the set of corporate bonds, floating rate notes, and bond-like preference shares listed on the exchange. These securities are traded and settled in the same way as ordinary shares, but the ASX provides information such as their maturity, effective interest rate, etc., to aid comparison.[18]

SPI 200 Futures – Futures contracts on an index representing the largest 200 stocks on the Australian Stock Exchange by market capitalisation.

AU 90-day Bank Accepted Bill Futures – Australia's equivalent of T-Bill futures.

3-Year Bond Futures – Futures contracts on Australian 3-year bonds.

10-Year Bond Futures – Futures contracts on Australian 10-year bonds.

The Sydney Futures Exchange (SFE) was the 10th largest derivatives exchange in the world, providing derivatives in interest rates, equities, currencies and commodities. The SFE is now part of ASX and its most active products are:


The ASX trades futures over the ASX 50, ASX 200 and ASX property indexes, and over grain, electricity and wool. Options over grain futures are also traded.

Market indices[edit]

The ASX maintains stock indexes concerning stocks traded on the exchange in conjunction with Standard & Poor's. There is a hierarchy of index groups called the S&P/ASX 20, S&P/ASX 50, S&P/ASX 100, S&P/ASX 200 and S&P/ASX 300, notionally containing the 20, 50, 100, 200 and 300 largest companies listed on the exchange, subject to some qualifications.

Sharemarket Game[edit]

The ASX Sharemarket Game give members of the public and secondary school students the chance to learn about investing in the sharemarket using real market prices. Participants receive a hypothetical $50,000 to buy and sell shares in 150 companies and track the progress of their investments over the duration of the game.[19]

Merger talks with SGX[edit]

ASX was (25 October 2010) in merger talks with Singapore Exchange (SGX). While there was an initial expectation that the merger would have created a bourse with a market value of US$14 billion,[20] this was a misconception; the final proposal intended that the ASX and SGX bourses would have continued functioning separately. The merger was blocked by Treasurer of Australia Wayne Swan on 8 April 2011, on advice from the Foreign Investment Review Board that the proposed merger was not in the best interests of Australia.[21]

Company performance (financial year)[edit]

2015 – Information Services and Technical Services revenues grew by 8% and 10% respectively, while Austraclear chipped in with 9%. Another bright spot was the dividend from IRESS, which rose 47% from the prior period, to $4.9m. This financial software company has risen by 27% over the past couple of years and ASX's 19.3% stake is now worth $334m, more than 4% of its own market value.[22]

List of stock exchanges

List of futures exchanges

List of Australian exchange-traded funds

All Ordinaries

Odd lotter

Official website

. Archived 24 April 2013 at the Wayback Machine.

ASX Annual Report 2012

Australian Stock Exchange and National Guarantee Fund Act 1987