ASX, SGX Jointly Host Data Centre

The Australian Stock Exchange (ASX) and Singapore Stock Exchange (SGX) will jointly host a data centre beginning September to boost the flow of futures activity between the two major bourses.

ASX Deputy Chief Executive Peter Hiom said the new initiative is part of ASX's plan to internationalise Australia's largest stock exchange.

In 2011, Canberra rejected an $8.4-billion takeover bid by the SGX for ASX since it was against the national interest of Australia. The decision made SGX instead focus on organic growth via new products and improved connectivity with other global exchanges rather than pursuing mergers and acquisitions.

SGX will host ASX's trading hub at its data centre in Singapore which is also used by other traders that seek access to SGX's derivatives markets. The move would make it easier for Singapore-based traders to buy and sell futures listed in ASX by simply using their existing links to the SGX data centre.

"It demonstrates that by working together with other exchanges we can deliver new and greater investment opportunities to Australian and foreign investors," Mr Hiom was quoted by the Financial Post.

ASX General Manager of Trade Execution David Raper said that Singapore traders will just need to hook up to the SGX data centre to trade ASX products, while ASX would offer the same service to traders in its data centre in Sydney in early 2013.

SGX operates the largest offshore market for Asian equity derivatives and is the only global venue for Chinese and Indonesian futures contracts in equity indices. It inked earlier this month a cross-quotation agreement with the London Stock Exchange.

ASX said it is mulling offering the same service in London, Chicago and Hong Kong where it has trading centres. These hubs generate 6 per cent of ASX's 24's futures and options volume.

Meanwhile, the ASX announced that small- and medium-sized companies would find it easier to raise capital after the stock exchange issued new listing rules that permit SMEs to issue an extra 10 per cent of their share capital in 12 months by placement.

Only companies with market capitalisation of less than $300 million and are not listed in the S&P/ASX 300 could avail of the new rule which seeks to improve the competitiveness of Australia's financial markets while protecting shareholders and allowing timely capital raisings.

The extra 10 per cent share placements must be approved by 75 per cent of shareholders at the company's annual yearly meetings.