The Australian Stock Exchange is bullish on mutual recognition.
Following last month’s signing of the historic international regulatory pact by the Securities and Exchange Commission, its Australian equivalent, the Australian Securities and Investments Commission, and the Australian government, the ASX is predicting an easier time of it in winning business from U.S. broker-dealers.
“We are very happy with the SEC, ASIC and our government for doing this,” Richard Murphy, general manager, equity markets, at the ASX, a division of the Australian Securities Exchange, tells Traders Magazine. “Our attempts at sales and marketing in the U.S. over the past decade have been quite hampered. This frees things up.”
The agreement, which is in pilot phase and could face opposition, allows Australian brokers and exchanges to do business in the U.S. without registering here. It also grants U.S. exchanges and broker-dealers the same privilege.
Underlying the new found freedom is the belief by the SEC and the ASIC that their regulatory regimes are comparable. Thus, because Australian exchanges and brokers, for instance, are subject to rules and regulations similar to those found in the U.S., they should be free to do business in the U.S. without falling under U.S. regulatory oversight.
Also, the two regulatory bodies are signing memorandums of understanding that will facilitate investigative and enforcement activities in either country.
Both regulators will begin considering exemptions for exchanges and broker-dealers to each other’s rules on a case-by-case basis early next year.
The ASX plans to file for an exemption then, according to Murphy. After that, it will decide how aggressively to approach U.S. broker-dealers. It will take into account the opinions of local Australian brokers, he added.
