The first hurdle against the $8.4 billion Australian Securities Exchange (ASX) and Singapore Stock Exchange (SGX) merger proposal has just been overcome as the Australian Competition and Consumer Commission (ACCC) made known its clear intention to allow the acquisition deal.

The competition watchdog said on Wednesday that its central concern of an ample competitive environment remaining in Australia's stock market operations have been sufficiently answered as it adjudged that the entry of a rival exchange entity would not be deterred by the blockbuster merger.

Chi-X Australia Pty Ltd (CXA) is in the process of introducing an electronic market exchange operation in the country through Chi-X Global (CXG), which in turn has an existing joint venture deal with SGX.

The ACCC, however, has determined that the business relationship existing between SGX and CXG would not in anyway affect CXA's trading fortunes in building up a lit trading venue in the country.

While emphasising that Singapore exchange is bereft of any economic interests on CXG's ventures, ACCC chairman Graeme Samuel said in a statement that "the extent to which Chi-East and the ASX would compete in relation to dark pool trading services is limited."

Samuel added that dark pool providers abound in Australia, which should give enough competition to the operations of a merged ASX-SGX entity.

The ACCC also noted that its investigation on the proposed merger yielded indications that "dark pools which are located offshore are unlikely to compete with dark pools located in Australia."

With the competition watchdog's approval, the deal now only needs to win the regulatory nod of Australia's Foreign Investment Review Board (FIRB) and its national parliament and following the expected approval of both entities' shareholders, Singapore's stock exchange should be able to wrap up its takeover of ASX by purchasing all its shares in a cash and scrip offer.

And that could happen by June 2011 at the latest, according to the ACCC, which concluded that the ASX-SGX merger would not diminish the prevailing competition environment in the share market following its ample determination that third party access to the merged entities' market data would remain available.

The ACCC has maintained that allowing third party access to market data by ASX-SGX would enable a competing entity to offer viable rivalry against the looming giant operation of the combined Australian and Singaporean market shares.

ASX chief executive Robert Elstone welcomed the ACCC findings and decision, which he said only confirmed his earlier pronouncements that the regulatory body would appreciate the benefits of the agreement and rule on its favour.